The Baltimore-based company said Tuesday it will acquire the French's, Frank's Red Hot Sauce and Cattlemen's brands from British food company Reckitt Benckiser. Frank's RedHot was already the top hot sauce brand in the US and Canada, and French's was already the top mustard.
"RB Foods' focus on creating products with simple, high-quality ingredients makes it a ideal match for McCormick as we continue to capitalize on the growing consumer interest in healthy, flavorful eating", Lawrence Kurzius, chairman and CEO of McCormick, said in a statement.
With the acquisition of Reckitt Benckiser's food division, McCormick is adding a roster of brands to its spice and seasoning mix portfolio that further strengthens the company's position as a go-to destination for adding flavor to a variety of dishes. It will also enable it to focus more closely on its consumer health and home brands, which include Durex condoms and Mucinex cold medicine. That's almost twice as high as the valuation McCormick was offering Premier and makes it unsurprising Unilever and Hormel chose to walk away.
French's Food will be sold after Reckitt's a strategic review of its business, in a bid to free up funds for its acquisition of baby food manufacturer Mead Johnson Nutrition.
McCormick & Co is mostly active in the spices industry and wants to use Reckitt Benckiser's food division to help expand its sauce activities. Revenue was £960mn, well above like-for-like figures for the same period past year.
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McCormick said it expected to achieve cost savings of about $50m by 2020 - but gave no further details.
The BBC says the sale will "pay off debt" taken on to complete the Mead Johnson deal.
Hong Kong developer Chinese Estates Holdings said it had accumulated 5 percent shares of China Evergrande Group since April in the open market, for a total consideration of HK$8.1 billion ($1.04 billion).
According to MarketWatch, McCormick previously tried to purchase the UK's Premier Foods, known for Mr. Kipling cakes and Oxo stock cubes.
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