𝓤𝓷𝓲𝓽𝓮𝓭 𝓝𝓮𝔀𝓼

Unilever bosses were repeatedly confronted by shareholders with concerns over the decision to merge its food business with US rival McCormick at a tense annual general meeting (AGM).

The board were forced to defend the £33.8 billion deal, which was agreed in March, at the meeting in London on Wednesday.

The joint venture will create a major food giant that combines brands such as Unilever’s Marmite with McCormick’s French’s mustard.

While Unilever and its shareholders will retain a 65% stake in the food business, McCormick will take on oversight of the business with eight of 12 seats on the board when the tie-up is completed by mid-2027.

During the AGM, several shareholders criticised Unilever’s bosses for approving the major deal without putting it to a shareholder vote.

Others shared concerns that Unilever’s historic leading position on sustainability could be weakened for the food business when it is folded into the separate entity.

Bosses argued that the board “unanimously supported” the move as a way to simplify the company and allow it to focus on its competitive home and beauty business.

They also said the bulk of shareholders have backed the decision as well.

In his opening remarks, chief executive Fernando Fernandez said the changes have been “both necessary and intentional” and will leave the firm “better able to compete in a world that is changing at an extraordinary pace”.

“At its core, this transaction creates two stronger, more focused businesses with an improved growth profile,” he said.

On sustainability, Mr Fernandez said Unilever’s values “remain constant”, with sustainability continuing to be embedded in the business.

During the Q&A session, the board was challenged on why it did not bring the decision to a shareholder vote and whether it would commit to doing so for future deals that would transform the business.

Mr Fernandez argued that not a single company has done so on similar deals since UK listing rules changed in 2024 so that it was no longer mandatory.

“The responsibility of the transaction lies with the board and … this has been a unanimous decision based on the value creation that it will create for our shareholders,” he said.

Pressed on whether Unilever’s commitments to reduce its impact on people and planet will be maintained by McCormick, the board said this will ultimately be up to the US firm.

But Mr Fernandez argued that the two companies have a “significant alignment of values and culture”.

“Sustainability is an important pillar for McCormick also,” he said.

“Of course, we have to iron a lot of details in what will be the policies of McCormack in the future.”

However, bosses will continue to use their four seats on the McCormick board to push for “those things in which Unilever believe, that we believe are important for society, for shareholders”, he added.

Chairman Ian Meakins said Unilever’s food business already made good progress last year towards cutting planet heating emissions from its supply chain, meeting nature goals and reducing plastic.

“I’m sure we will end up creating two faster growth companies but we’re very aware we now have to deliver against the commitments that we made, and ensure that our colleagues at McCormick also do,” he said.