管理層發言
Good morning. This is Faten Freiha, VP of Investor Relations. Thank you for joining today's call. While our original plan was to review McCormick's first quarter fiscal 2026 earnings results, today's discussion will focus on our announced combination with Unilever Foods and the strategic rationale for the transaction. Please note that this call is being recorded. The press release and accompanying slide presentation related to today's announcement along with the materials for our first quarter fiscal 2026 results are available on our Investor Relations website, ir.mccormick.com. With me this morning are Brendan Foley, Chairman, President and CEO of McCormick, Fernando Hernandez, CEO of Unilever, and Marcos Gabriel, Executive Vice President and CFO at McCormick. In our comments, certain percentages are rounded. Please refer to our presentation for complete information. Today's presentation contains projections and other forward-looking statements. Actual results could differ materially from those projected. The company undertakes no obligation to update or revise publicly any forward-looking statements, whether because of new information, future events or other factors. Please refer to our forward-looking statements on Slide 2 for more information. I will now turn the discussion over to Brendan.
Thank you all for joining our call. Marcos and I are pleased to have Fernando join us this morning as well. Today marks a major milestone for McCormick. We are bringing together two leading organizations, McCormick and Unilever Foods, to create a strong, scaled and growth-oriented company that will be flavor-focused and exceptionally well-positioned to succeed in today's dynamic environment. We have always seen the logic of this combination. We're excited by the opportunity to deliver end-to-end flavor experiences to even more people around the world, bringing the tastes that inspire, connect and bring joy to kitchens and tables everywhere. Before we go further, I want to quickly provide an update on McCormick's first quarter 2026 results. For the quarter, we delivered strong growth in sales, adjusted operating income, and adjusted earnings per share, supported by our McCormick de Mexico acquisition and organic growth across both Consumer and Flavor Solutions.
In a dynamic environment, we drove margin expansion through strong top line, acquisition accretion, and disciplined cost management. While our remarks and other materials from our results can be found on our IR website, as Faten noted, I want to underscore that consistent and strong core financial performance from both McCormick and Unilever Foods is foundational as you think about today's announcement. Now turning back to today's announcement, starting on Slide 5. McCormick and Unilever Foods are strategically and culturally aligned organizations. We each bring iconic brands in attractive categories spanning herbs, spices, seasonings, condiments and sauces. Bringing these portfolios together creates an opportunity to execute multiple growth levers, such as expanded distribution, accelerated innovation, brand premiumization and a scaled dual-engine Food Service platform. At the same time, we see significant and clearly actionable cost synergies layered on an already strong structural margin profile, creating capacity for continued investment and attractive shareholder returns.
Beyond strategy, our organizations share a common mindset, a passion for flavor, a belief in the power of people and relentless focus on quality and innovation and strong investment behind our brands. Turning to Slide 6. The pillars of the combined organization reflect distinct and complementary strengths across geographies, channels and categories. Together, we create a focused global flavor powerhouse, scaled, resilient and uniquely concentrated on flavor. Our balanced geographic and channel footprint enhances durability across economic cycles and market conditions. The breadth of the combined company diversifies our growth across emerging and developed markets and retail and commercial channels. In addition, this combination meaningfully expands McCormick's presence in structurally advantaged categories aligned with enduring consumer trends, more flavorful, convenient and focused on health and wellness.
We will continue to flavor calories while others compete for them, giving us a strong tailwind and aligning us to favorable consumption and growth trends. All of this results in a best-in-class margin profile that supports sustained industry-leading reinvestment behind brands from global leaders like McCormick, Hellmann's and French's to high-growth potential brands like Frank's RedHot, Cholula and MAI, along with strong regional favorites where we see exciting potential. Moving to Slide 7. We see a clear path to unlock incremental growth, grounded in the complementary strengths of our geographic footprints and go-to-market capabilities. Unilever Foods brands can benefit from McCormick's focus and strength of retail execution in the North America flavor aisle. At the same time, McCormick is positioned to expand more meaningfully in high-growth emerging markets by leveraging Unilever's established scale, deep local infrastructure and proven route to market.
In Food Service, the strategic link is particularly strong. McCormick's front-of-house brand equity and tabletop presence combined with Unilever Foods' deep back-of-house experience and operator relationships. Together, we create more complete end-to-end solutions for customers, strengthening relevance and deepening partnerships. Innovation is a shared strength. Both organizations have proven expertise in flavor development and format expansion across consumption occasions, complemented by Unilever's robust culinary capabilities and chef-to-chef engagement model. Before I expand on these growth opportunities, I will turn it over to Fernando for his perspective.
Thank you, Brendan. We are very enthusiastic about this combination, and about our partnership with McCormick. We are confident it delivers a compelling outcome for all stakeholders. As Unilever over the past several years, we have sharpened our strategic focus, reshaped our portfolio to our high-growth categories, and strengthened our operational foundation. This transaction is a natural extension of our strategy leading to value creation while giving our shareholders meaningful participation in the upside of the scaled global flavor-focused entity with a strong growth and margin profile. Importantly, this is a transaction anchored in a strategic and cultural fit. Both organizations operate in attractive categories where our brands, innovation and execution matter. Both bring disciplined capital allocation, strong cash generation, and a consistent track record of volume-driven growth, all driven by a performance-oriented culture with a commitment to quality and customer partnership. We believe the combination strengthens the competitive position of the business, enhances its growth prospects, and creates a more focused platform to lead in flavor globally. With that, I hand it back to Brendan.
Thank you, Fernando. Moving to Slide 9. I'd like to begin by reinforcing why flavor is a structurally advantaged category. When you think about food, we strongly believe flavor is the best place to be. It is the #1 purchase driver across dishes, trends and occasions. It transcends age, culture, dietary preferences and income levels, making it both resilient and highly relevant in a dynamic consumer environment. Importantly, flavor is fully aligned with today's health and wellness priorities as consumers increasingly focus on cooking at home, adding more protein and produce and pursuing healthier lifestyles—flavor plays a critical role in elevating those choices. Younger consumers, particularly Gen Z, are notable contributors to these trends. Taken together, these favorable flavor tailwinds position us well to drive sustainable growth as a combined company. The highly complementary nature of this combination gives us multiple ways to capitalize on these tailwinds.
The clear, tangible, and many growth levers we see across this combination create real excitement for all of us here. Let me highlight our four priority areas of focus on Slide 10. Maximizing our reach by leveraging expanded distribution in a highly complementary portfolio across markets; unlocking incremental growth by scaling high-growth potential brands across new geographies, channels, and consumer occasions; integrating McCormick's Flavor Solutions and Unilever's Food Solutions enhances our dual-engine model with a scaled globally distributed platform with strong brand equity among chefs and operators; and accelerating innovation at scale by leveraging our shared R&D and technology to lead the future of flavor and stay ahead of evolving consumer preferences. These areas of focus are actionable growth levers for the combined company. Moving to Slide 11. Together, we have an end-to-end flavor proposition, from cooking to condiments with brands that have minimal overlap and maximum adjacency.
Our iconic globally recognized brands, Knorr and McCormick will enable us to be part of more cooking occasions across more markets. At the same time, our Condiments portfolio, including hot sauces, mustard, and mayonnaise, allows us to be present in even more kitchens and on more tabletops, meeting consumers' growing needs for healthy, flavorful meals. Moving to Slide 12. Beyond adjacency, the combination also accelerates the opportunity for high-growth potential brands. The brands on the slide as well as the number of brands in our portfolio enjoy high consumer loyalty, connection to consumer trends and global appeal, particularly with young consumers. For example, we have the leading share in hot sauce in the U.S. with Cholula and Frank's. We have begun expanding in EMEA where we have seen great success in highly competitive markets. For example, Cholula in France, and through Unilever's capabilities, we'll be able to accelerate expansion, not just in EMEA, but also in Latin America and Asia Pacific.
With Unilever's Foods strong presence in these regions, these brands will have substantial opportunities to expand their distribution and reach new consumers. Another unique opportunity is MAI—an almost 280-year-old French brand deeply connected to French culinary tradition as a prestige mustard and mayonnaise brand. We see opportunities to scale its presence across a number of new large markets, similar to what we have done with Cholula. This is just one example of many that we see across the portfolio. In addition to retail expansion, Slide 13 highlights the power of our combined Food Service platform. Together, we will strengthen the scale business-to-business leader with approximately $6 billion in pro forma annual sales, positioning us among the largest global food service players. Unilever's Food Solutions brings global presence with deep back-of-house capabilities and culinary expertise that meaningfully expands McCormick's reach across multiple food service operators.
Complementing that strength, McCormick offers a powerful branded front-of-house presence and an extensive partnership network, particularly across independent non-commercial and chain operators. This creates significant cross-selling opportunities. We see clear potential to elevate key Unilever Foods brands while utilizing our partnerships to drive awareness and trial. In turn, this visibility will reinforce retail demand and brand equity, creating a virtuous cycle across channels. Supporting all of these growth opportunities is innovation. Slide 14 outlines how we will leverage our combined technology and R&D capabilities, an essential strategic pillar and long-term competitive advantage. Together, we bring leading capabilities in R&D and flavor science, underpinned by deep consumer insight, culinary expertise and advanced technology platforms. By combining our resources, we meaningfully expand our capacity to innovate, accelerate speed to market, and drive differentiated solutions across retail and food service.
Our capabilities are highly complementary. We bring our leadership in seasonings and heat and our expertise in natural ingredients, while Unilever brings technology that enhances texture and their ability to leverage protein as a flavor. All of this positions us to support customers in delivering on consumers' evolving dietary needs as well as accelerate innovation across the portfolio. By combining our technology, culinary and scientific expertise, we are building a differentiated flavor innovation engine designed to sustain growth and reinforce category leadership over the long term. As Fernando noted, McCormick is the natural home for Unilever Foods brands. We have long thought about this combination, and we'll bring it to lessons learned from our M&A journey, which has been deliberate and strategic. As you can see on Slide 15, we focus on strengthening our leadership in heritage herbs and spices, expanding internationally, building scale in condiments and sauces, and growing our business-to-business flavor solutions platform.
Each transaction has aligned with our long-term vision and disciplined capital allocation strategy. And this combination with Unilever is no different. While this transaction is larger than prior deals, the core drivers of success are the ones we are familiar with. This will be my top priority, and we are approaching it with confidence and humility. We have already begun integration planning in partnership with the Unilever team. Let me share some of the details on Slide 16. We are building a detailed integration plan well ahead of close, positioning us to execute efficiently and with strong governance. Dedicated leaders from both companies have clear responsibilities, supported by experienced external integration partners. Unilever brings significant carve-out expertise and remains financially invested, including two years of Board representation, ensuring alignment. Business continuity is central to our approach with comprehensive TSA support across key functions.
In addition, we have tremendous respect for the talent at Unilever Foods, and they are integral to the success of this integration and long-term value creation. We are defining the target operating model early and executing market-by-market to balance speed with precision. Synergy targets are aligned back by a structured delivery roadmap, and a detailed IT transition plan is already in motion to ensure secure and seamless integration. At the same time, we are proactively shaping the commercial agenda to unlock the growth potential of this portfolio from the outset. We know what works. Welcoming extraordinary talent from Unilever Foods, retaining key capabilities, and applying proven playbooks to scale brands and accelerate innovation. This disciplined integration paired with intentional growth acceleration is designed to deliver value while maintaining operational continuity from day one.
Before turning it over to Marcos, let me highlight why this transaction makes so much sense right now on Slide 17. We have long seen the benefits of the overwhelming strategic fit between the two businesses. Both businesses are in a strong and growing position, benefiting from structural tailwinds. Together, we will create a company that is stronger, more resilient and ready to deliver on its full potential in a dynamic environment. With that, I will turn it over to Marcos to discuss the combined company's financial profile.
Thank you, Brendan. This transaction represents a significant milestone for both companies. Together, we're creating a global flavor leader with expanded scale and capabilities, positioning attractive high-growth categories supported by a strong and compelling financial profile. Let's begin on Slide 19 with an overview of the transaction structure, which was also outlined in our press release. This combination has been thoughtfully designed to create long-term value for each set of shareholders. The transaction is structured as a Reverse Morris Trust, as we are issuing a fixed number of McCormick shares as consideration for Unilever Foods upon closing. This issuance is expected to result in pro forma ownership of the combined company's equity of 65% for Unilever and its shareholders and 35% for McCormick shareholders. Unilever will also receive $15.7 billion in cash, subject to customary closing conditions.
This is the optimal combination of debt and equity that allows McCormick shareholders to realize significant value from the transaction, supported by the borrowing capacity of the combined company, which is expected to generate strong operating cash flows. The transaction implies an enterprise value for Unilever Foods of approximately $44.8 billion and approximately $21 billion for McCormick, representing a multiple of approximately 13.8x calendar year 2025 EBITDA for both companies based on a one-month volume-weighted average share price. From a governance and leadership standpoint, Brendan and I will continue in our current roles, ensuring continuity of strategy and execution. McCormick will remain globally headquartered in Hunt Valley, Maryland, reinforcing our commitment to our heritage while building a scaled global flavor leader. In addition, the combined company's international headquarters will be in the Netherlands, where a substantial presence will be retained in areas like R&D, among others.
Now moving to the financial profile of the combined company on Slide 20. On a pro forma 2025 basis, annual net sales are projected at $20 billion, supported by volume-driven growth and best-in-class operating margins of 21%. Building from this foundation, we see clear opportunities to further enhance the profile through meaningful revenue and cost synergies. We plan to reinvest incremental revenue and cost synergies back into the business to accelerate growth. Specifically, approximately $100 million will be reinvested into our brands through increased marketing to support innovation, fueling sustained volume growth and strengthening our competitive position. In addition, we anticipate $600 million in annual run rate cost synergies, representing about 8% of McCormick's 2025 pro forma sales, including McCormick de Mexico. The synergy expectations are compelling given the limited overlap and existing efficiency levels of both organizations, which reinforces our confidence in the value creation potential of this combination.
Importantly, synergy delivery will be supported by proven capabilities in partnership with the Unilever team. Our comprehensive continuous improvement program, or CCI, has consistently delivered cost discipline, productivity gains, and operational efficiency across the organization. By applying this established framework to the combined business, we're well positioned to execute with rigor and translate scale into sustainable margin expansion and long-term value creation. Turning to Slide 21. We outlined the key areas where we see clear opportunities to unlock cost savings across the combined company. Through a comprehensive diligence process, leveraging cross-functional teams from both organizations, we have identified actionable savings across procurement, media, manufacturing, logistics, and SG&A. This resulted in a balanced set of opportunities across cost of goods and SG&A. We expect to realize the $600 million in synergies by year 3, with approximately two-thirds captured by the end of year 2, reflecting disciplined and phased integration plans.
Turning to Slide 22. When you combine the strength and momentum of both stand-alone businesses with the impact of these revenue and cost synergies, the result is a structurally advantaged, best-in-class financial profile. This is about focus on scale and profitable growth. The combination is expected to deliver meaningful accretion in the first full year across sales growth, adjusted operating margin, and adjusted earnings per share. By year 3, as synergies are realized, we expect sustainable organic sales growth of 3% to 5%, supported by deliberate reinvestment in our brands and an enhanced innovation engine. At the same time, operating margins are expected to expand to approximately 23% to 25%, reflecting structural efficiencies, procurement scale, supply chain optimization, and SG&A leverage. Together, this creates a higher growth, higher-margin platform with stronger cash generation, positioning the combined company for durable long-term value creation and sustained profitability.
Moving to Slide 23. The combined company will maintain a solid and resilient balance sheet, underpinned by strong, consistent operating cash flow and a disciplined capital allocation framework. This foundation supports meaningful deleveraging while enabling McCormick's long-standing practice of returning capital to shareholders through dividends for the combined company. Both McCormick and Unilever have long-standing commitments to shareholder returns and historically have maintained a dividends payout ratio of approximately 60%. We expect the combined company to maintain a dividend consistent with this history. Strengthening the balance sheet is a clear priority; we expect net leverage to be at or below 4x at closing and plan to reduce it to approximately 3x within 2 years, supported by robust cash generation and disciplined execution. Throughout this period, we expect to maintain our strong investment profile and preserve the financial flexibility that has long differentiated McCormick. With that, I'll turn the call back to Brendan.
Thank you, Marcos. Before I wrap up, Fernando and I would like to summarize the benefits of this deal for our respective shareholders. Strategically, this combination meaningfully expands our portfolio with iconic, high-growth potential and local favorite brands, strengthens our presence in attractive geographies, and enhances our scale with customers around the world. McCormick becomes a preeminent global flavor powerhouse, advancing our vision to be a global leader in flavor. Financially, the combination is compelling for our shareholders. We expect it to be accretive to McCormick's growth, adjusted operating margin, and adjusted earnings in just the first full year with continued long-term growth and upside to our financial performance. We expect to maintain a strong balance sheet supported by disciplined capital allocation and clear deleveraging priorities, and our commitment to returning cash to shareholders through dividends remains unchanged. Ultimately, McCormick shareholders gain access to a larger, more diversified business with faster growth, a stronger margin profile, and a continued commitment to shareholder returns.
For Unilever shareholders, this is about unlocking shareholder value, giving shareholders exposure to a pure-play home and personal care company and to the upside in the global flavor leader.
Thank you, Fernando. To wrap up on Slide 25, what we hope you take away from our call today is the following: this combination is strength plus strength, with two highly complementary flavor leaders coming together. Together, we are creating a scaled global flavor-focused company with leading brands in attractive advantaged categories. We see multiple levers to accelerate growth while leveraging the power of leading iconic brands, high-growth potential brands, and local flavors. At the same time, we have plans to deliver clear achievable cost synergies and building on a best-in-class financial profile with meaningful accretion, strong margins, and a compelling return profile, supporting our continued investments in growth. We recognize that integration is crucial and acknowledge the work ahead. We are prepared to execute, supported by a comprehensive integration plan, positioning us to execute efficiently and with strong governance. Through it all, McCormick will be McCormick, grounded in 137 years of leadership and guided by a passion for flavor. With that, operator, please open the line for questions.
分析師問答
Our first question comes from Andrew Lazar with Barclays.
Maybe to start off, McCormick's track record on M&A and integration, as you mentioned, is admirable. But obviously, this one is just many times larger, and the industry's track record with larger deals is pretty mixed. What gives you the comfort in taking such a big swing on this one? And really, what are you doing maybe differently on this one from an integration standpoint, just given the sheer scale.
Well, thanks for the question, Andrew. We're ready to take on the integration at this level of scale, and we recognize, though, more importantly, what we're taking on. First, there are a couple of important steps that have to be completed before close. So we need to do regulatory filings to prepare for a shareholder vote, but also Unilever's needs to separate its Food business from the overall Unilever organization. So those are certain things that have to happen in advance, obviously, during this period. We are arranging our playbooks to make sure that we have the right integration approach, and I would just maybe break it down into three broad areas. The first starts with a best-in-class external partner to help guide this. And so we already have that type of firm on board to really help us think through the best way to approach integration. We have done that in the past; it's been very successful and has kept us really, I think, executing against our expectations.
As you know, in all the integrations very recently, we tend to over-deliver on our objectives there. But we also have a year or more to thoughtfully develop a disciplined plan. That's really an important period of time, obviously, to make sure that we get this right. During that period of time, there will be dedicated leadership on this, but it's also a combination of not only McCormick leaders being a part of this but also Unilever leaders too, because they're also committed to this being a successful integration. We're also planning brand acceleration at the same time against that agenda to deliver the growth potential. And so there are examples where we've done this, obviously, with French's and Frank's, but I would even look to past acquisitions where we modify the integration approach based on the business. We don't execute necessarily a standard integration approach on every one of them because each business is different.
They present different opportunities. That's why we take a very deliberate approach on a case-by-case basis. Overall, I think the magic in terms of how we look at this is not approaching everything the same way, but making sure we get the right approach for each individual situation. We will also have to execute a thoughtful separation supported by TSA agreements, and we have a very experienced partner in Unilever to get this done. Unilever employees are remaining with the business, which minimizes disruption. I believe we're very well-positioned for this integration and have great leadership on both sides committed to success.
And then maybe second, just quickly. Unilever Food EBIT margins are already in the sort of low 20s level. Not many food companies have been able to reach, let alone sustain. Are you comfortable that the brands have been appropriately invested in such that margins like these are, in fact, sustainable? Maybe Fernando can comment on it as well.
Let me open it up and then I'll ask Fernando to add some context there. When you look at both of our companies, you see robust support for the brands from a standpoint of brand support and innovation. We definitely have a strong baseline that we're walking into this with, but we're going to add to it.
Thank you, Brendan. We have been investing around 10% in brand marketing investment behind our Food business. It's probably one of the best supported businesses in the industry, ensuring the benefit of a healthy gross margin in the mid to high 40s. We've built a durable foundation here, and we have a very well-supported framework for long-term growth.
I would add to what Fernando just said. As we mentioned in my prepared remarks, we are going to continue to invest going forward, particularly in the cost and sales synergies. We are targeting about $100 million that will be reinvested back into the business to support and fuel sustained volume growth, strengthening our competitive position. So that momentum will continue moving forward.
Our next question comes from the line of Steve Powers of Deutsche Bank.
Brendan and maybe Fernando, you can weigh in here too. I guess my understanding is that Unilever Food and HPC operations are pretty well integrated in certain markets around the world. As part of the integration plan, Brendan, you mentioned TSA agreements. Could you speak at a high level to the scope and anticipated duration of those agreements? And maybe the costs associated over time with McCormick standing up its own operations?
Yes. From a TSA agreement standpoint, it's probably not going to be just one overall form. When you think about it from an IT system perspective and the separation there and rehooking it with us, we’ll have TSA considerations in that. We're going to have TSA agreements for the first year of integration together as a company. Fernando, do you want to add to that?
Yes. Since 2022, Unilever has moved into an organizational model in which we have separated our four key business groups. They run fundamentally as stand-alone organizations. This ensures that we build the capabilities required to compete effectively while maintaining the flexibility for separations of this magnitude.
Great. And then, Marcos, if I understand the deal structure correctly, it looks like you're going to be financing the transaction with new financing and new debt versus absorbing any debt from Unilever. Can you talk to the drivers there? Are there restrictions from Unilever signing its existing debt, or is it just the rationale of going to the market new?
No. The rationale is really a combination of stock and cash deal, structured as an RMT. We are providing a fixed number of McCormick shares as consideration for the Unilever Foods business. This is based on the enterprise value for Unilever Foods of approximately $44.8 billion, which places us at a 13.8x EBITDA multiple. We're comfortable with the leveraged position this gives us while also ensuring a healthy margin profile.
Our next question comes from Tom Palmer with JPMorgan.
You noted the combined organic sales growth last year of 2.4% set against a view of 3% to 5% longer term. Brendan, you gave some reasons why you anticipate sales re-acceleration over the next couple of years. Maybe we could do a smaller exercise for the combined company, particularly thinking through how much of that acceleration is more about industry conditions versus maybe more self-help type initiatives?
Sure. Thanks, Tom, for the question. When combined, we have to think about the fact that we're one-third of the equation right now and the Unilever Foods business is two-thirds of the equation. As we bring these businesses together, we see stronger growth in the range that we had on the slide there—3% to 5%. Both businesses have been delivering volume-driven growth consistently over the last several years. So we start with confidence in the base business. We see the combination driving the opportunity to strengthen the growth profile together.
Yes, you did. Just a follow-up on the Mayonnaise side. You do have McCormick de Mexico consolidated now, and Unilever obviously has a large Mayonnaise business. Just wanted to ask on the overlap and if there might be any limitations to consider in combining these.
Yes. Right now, it's too early to speculate on that type of thing. We look forward to working with the regulatory authorities on ensuring we review this transaction thoroughly and we'll be able to talk about that at a later date.
Our next question comes from Alexia Howard with Bernstein.
Can I start off with—you talked about the deal being meaningfully accretive to earnings, and I think earnings per share was mentioned from the outset. Are you able to put a number or an order of magnitude around that? And what source of that accretion might be?
At this moment, we are not putting a specific number down. It is meaningfully accretive in year one post-close across all lines of the P&L, including EPS. We expect the combination to deliver strong margins and sustain significant growth, especially as we realize synergies of $600 million that flow through to the bottom line.
Okay. And then just looking around the world, where do you see the revenue synergies being most significant? I imagine Brazil might be a place where the McCormick brand could be strengthened given the strength of the Mayonnaise brands from Unilever over there. But are there other parts of the world where revenue synergies could be significant?
Yes. I'm going to make a couple of comments here and ask Fernando also to provide his perspective. I see it as not necessarily dedicated to one or two different regions. Rather, it's across many different regions. If you think about North America, Latin America, EMEA, and Asia Pacific, in each region, we see opportunities. For instance, in Asia Pacific, there are a number of markets that Unilever is in that we're not in, where we can drive stronger growth. In EMEA, there are markets where McCormick doesn’t have a presence and we see synergy opportunities there. South America, particularly Brazil, is indeed a strong opportunity for combined branding efforts.
Yes. On top of the shared strength of the product portfolios, I believe that McCormick brings an incredible product range and global distribution. When leveraging these two strengths, we have huge opportunities. I see significant potential in Asia, Latin America as well as the food service segment as mentioned. McCormick's leadership in front of house combined with Unilever's back-of-house gives us a strong competitive position.
Our next question comes from Peter Galbo with Bank of America.
Just one quick clarification. I believe the Unilever India subsidiary had talked about maybe not including the Food business in the transaction. Can you just clarify for us, will the transaction include India Foods or is that excluded from current thinking?
Yes. To be certain, the transaction does not include India Foods.
Our next question comes from the line of Peter Galbo with Bank of America.
I know Fernando just gave a bit of an overview on food service opportunities. For Brendan, it would be helpful to hear from you just to expand on where you see—are you bringing more of the Unilever assets into the front of house in food service? Is it more that Unilever helps McCormick get more into back of house? Just where you see kind of the revenue synergies on the food service side?
Thanks for question, Peter, on Food Service. Food Service is an exciting area. Let's talk front-of-house first. When I think about the brand portfolio for Unilever, the opportunity is really around the Hellmann's brand, which could grow in front-of-house presence. At the same time, Knorr has a strong back-of-house position. Unilever's food service presence is definitely a strong global player, and we see McCormick having an opportunity to accelerate our growth in Food Service globally. The synergies in the food service channel are significant and we plan to leverage those effectively.
Our next question comes from Robert Moskow with TD Cowen.
I think this is a question for both management teams, but it's going to take a year for this transaction to close theoretically. Fernando, maybe you could talk about what you learned in the process of separating ice cream, how you were able to keep people on that team focused on executing their operating plan? And I guess the same question for the McCormick team.
Well, thank you, Robert. Yes, we have a recent experience of separating ice cream, which was a big business. In that case, we’ve had a capable team that is now at the service of McCormick to make this transition happen. I believe we learned a lot from previous experiences, and we shared strong leadership and continuous support from both sides to ensure this integration is successful. We will maintain a significant focus on our operational plans throughout.
Rob, I think from a McCormick perspective, our focus will also be on continuing to drive business performance. We have a strong team and will ensure dedicated leadership to keep the momentum as we manage the integration process. Our successful history with previous integrations gives us confidence to execute this one effectively.
Our next question comes from the line of Max Gumport with BNP Paribas.
Thanks for the question. You've quantified synergies and discussed some of the considerations with regard to the separation, such as TSA agreement. But I'm wondering if there's been any considerations for dis-synergies that could arise from the separation and if so, the initial quantification of those dis-synergies and also how they might split across the remaining company and the Foods business?
We don't see any revenue dis-synergies here. Our Food business operates with its own manufacturing, operations, and logistics, so we don't see any fundamentals of dis-synergies on our side.
Great. Very helpful. And then, Brendan, Marcos, regarding the multiple, the 13.8x EBITDA multiple, can you just talk a bit more about the conversations that went into determining what was the right multiple to pay? It seems like there is some focus on not paying more than McCormick’s 13.8x that you also quoted. Any color or consideration that went into determining the right multiple would be appreciated.
Both businesses are strong. Unilever Food is a fantastic addition as we merge the two companies. Our assessment led us to aim for parity in the EBITDA multiple, which we felt was appropriate as we look to the scale and healthy margins both companies provide. That balance is key in this transaction.
Our final question this morning comes from Scott Marks with Jefferies.
The first one I just wanted to touch on, understand all the synergy potential and the overlap between some of the portfolios, but just wondering if you can kind of help us understand if the current backdrop in the food world or in the staples world in general has changed your timeline for this or given you any sense of urgency to get this done? Or if it has had any impact any other way.
Yes. There’s a lot going on in the world right now. However, we’ve always viewed Unilever Foods as a great strategic fit. We're at a moment where there will always be something going on, but this transaction is about the long-term potential of the combination and the multiple levels of growth in established and emerging markets and across channels and brands. So while we are cognizant of the near-term pressures, our confidence in the fundamentals that underpin this combination remains strong.
Understood. Appreciate that. And then maybe just last one. Given everything going on in the Middle East, just wondering how some of those dynamics impact your thinking on this, whether it's in terms of realizing some of those synergies or getting this deal complete or any other dynamics that could be impacted by what’s happening across the world.
No. I can't point to a specific element that caused us to think about this differently. I would just reiterate the long-term nature of our strategy and our thought process in pursuing such a transaction.
Thank you so much. Thank you, everyone, for joining our call today. If you have any further questions regarding today's information, please feel free to reach out to me, and this concludes our conference call for this morning. Thank you.
Thank you. Ladies and gentlemen, you may disconnect your lines. Thank you for your participation.