Unilever PLC (LSE:ULVR), the FTSE 100 consumer goods giant, has confirmed it is in discussions with McCormick & Company about selling its foods division, in a deal that could reshape one of Britain's largest companies.
The London-based group said it had received an inbound offer and is now in active talks, while cautioning that no agreement has been reached.
The foods business generated an operating profit of €2.9 billion last year, giving it an estimated enterprise value of around €30 billion, based on Barclays analyst estimates.
The division, which has annual revenues of €13.4 billion, is home to Knorr, the world's leading bouillon brand worth around €5 billion, and Hellmann's, the world's number one mayonnaise brand worth nearly €3 billion.
A deal could come together by the end of the month and would be structured as a Reverse Morris Trust, a type of merger designed to be tax-free, according to reports.
McCormick, the Maryland-based spices and seasonings maker, has a market value of around $14.5 billion, dwarfed by Unilever's $134 billion valuation.
Despite its scale, the foods unit has faced mounting pressure from competition from private-label brands and softer consumer demand linked to the growing popularity of weight-loss drugs, which are changing eating habits.
The division is Unilever's second largest by sales after personal care, but grew at just 2.5% last year, well below the company's own medium-term targets.
A sale would form part of a broader pivot towards health and beauty products, including brands such as Dove, Vaseline and Nexxus.
Under chief executive Fernando Fernandez, the company has already spun off its ice cream division into Magnum Ice Cream Co. and exited parts of its food portfolio, including the global spreads business, Graze and The Vegetarian Butcher.
Talks with Kraft Heinz over a potential merger of parts of their food businesses were reportedly also held recently, but those discussions have since ended.