McCormick & Co Inc.'s (MKC) deal to buy the food division of Britain's Reckitt Benckiser Group plc (RBGLY) ,coupled with activists going after Procter & Gamble (PG) and Nestle SA (NSRGY) , has spared a frenzy of speculation in the consumer staples market.
McCormick late Tuesday said it had agreed to pay $4.2 billion for Reckitt's food division, which includes French's mustard, Frank's Red Hot Sauce and Cattleman's BBQ Sauce.
Consumer brands giant Unilever plc (UL) was rumored to have involved in a bidding war for the division, which includes French's mustard, Frank's Red Hot Sauce and Cattleman's BBQ Sauce. Hormel Foods (HRL) and Birds Eyes Pinnacle Foods (PF) were also said to be bidders in a Sunday Times article on July 16.
Unilever shares were up at 0.35%, changing hands at 4,305 pence, extending a 9.22% over the past three months, while Premier Foods plc PRRFY, a former McCormick target, gained around 0.5% after having lost 11.05% over the past three months.
The maker of flavorings Bisto and Oxo and desert Angel Delight was the subject of a £537.3 million ($700 million) takeover bid by McCormick in 2016. In April 2016, McCormick walked away from the negotiating table saying it would not be able to match the price considered acceptable by Premier Foods' board.
The move by McCormick comes at a changing time for the food industry. Unilever earlier in the year was the subject of an aborted takeover bid by Kraft Heinz Co. (KHC) , at $143 billion it would have been the biggest takeover in the sector. Under British corporate law, Kraft Heinz was legally prohibited from making another bid for six months.
