Food company McCormick & Co. recently signed a definitive agreement, subject to customary closing and regulatory conditions, with Grupo Herdez to acquire an additional 25% ownership interest in McCormick de Mexico, a joint venture formed in 1947, for $750 million. The acquisition will increase McCormick's ownership to 75%, creating opportunities for further growth in the Mexican market. Additionally, the transaction provides a strategic platform for further expansion in Latin America. McCormick de Mexico is a food company in Mexico with a broad portfolio including spices, marmalades, mustard, hot sauce and more, sold under McCormick brands.

"This marks the beginning of an exciting new chapter for McCormick in Mexico. With this expanded ownership, we will advance our global flavor leadership and increase our presence in condiments and sauces," said Brendan M. Foley, McCormick & Co. chairman, president and chief executive officer. "The McCormick brand has been a household staple in Mexico for 78 years, with market leadership in high-growth categories, most notably in mayonnaise.

“In addition, the brand commands strong loyalty among Mexican consumers and foodservice operators. The strength of the brand and its remarkable track record combined with our differentiated global flavor expertise and capabilities will enable us to drive further growth in Mexico, an attractive and high growth market."

Foley said, "We have had a long and successful partnership with Grupo Herdez, and we look forward to continuing our collaboration. With the expanded ownership of McCormick de Mexico, we plan to build upon their strong results by leveraging our combined expertise in category management, insight-driven innovation as well as best-in-class marketing to expand in adjacent categories and increase channel penetration. Additionally, this transaction creates a strategic platform for scaling our operations and distribution across Latin America, consistent with the strategic plans we laid out at Investor Day."

"We are proud of the nearly 80 years of productive partnership we have built with McCormick, and this transaction marks an exciting evolution of our relationship," said Héctor Hernández-Pons Torres, chairman and chief executive officer of Grupo Herdez. "This milestone will enable the McCormick brand, with its rich heritage and diverse flavor portfolio, to reach even more consumers across Latin America. With McCormick's extensive expertise in herbs and spices, condiments and sauces and global flavor leadership, we are excited to capitalize on new opportunities and achieve even greater success together."  

McCormick de Mexico's annual net sales are approximately $810 million, excluding export sales, and are expected to grow in the mid-single digits range. The strength of the brand combined with McCormick's global capabilities creates additional growth opportunities through category expansion, increased household penetration, and channel expansion in Mexico and across Latin America.

McCormick anticipates the expanded ownership in McCormick de Mexico will drive long-term shareholder value. The transaction will expand the global condiments and sauces portfolio, increasing its contribution to net sales from 14% to 22% following the close.
 McCormick is leveraging its expanded ownership in Mexico, a high-growth emerging market. As the second largest economy in Latin America, Mexico has a growing middle class with increasing income, fueling consumption growth. This dynamic, combined with a population eager to explore new flavors and global culinary trends, creates greater growth opportunities for McCormick's broad flavor portfolio. Furthermore, its strategic location provides further opportunities for expansion into Latin America.

The transaction is expected to be completed early in fiscal 2026 and will be financed with a combination of cash on hand and debt, with minimal impact to the company's Net Debt to Adjusted EBITDA ratio. The company will incur certain transaction costs that will impact earnings per share.

Goldman Sachs and Creel are serving as financial advisor and legal counsel, respectively, to McCormick in connection with the transaction.

Source: McCormick & Co Inc.