Unilever bosses faced repeated shareholder challenges over the decision to merge its food business with US rival McCormick during a tense annual general meeting (AGM) in London on Wednesday. The board was forced to defend the £33.8 billion deal, agreed in March, which will create a major food giant combining brands such as Unilever's Marmite and McCormick's French's mustard.
Under the joint venture, Unilever and its shareholders will retain a 65% stake in the food business, while McCormick will take operational oversight with eight of 12 board seats when the tie-up is completed by mid-2027. Several shareholders criticised Unilever's bosses for approving the deal without a shareholder vote, while others expressed concerns that Unilever's historic leadership on sustainability could be weakened when the food business is folded into the separate entity.
Bosses argued that the board "unanimously supported" the move as a way to simplify the company and focus on its competitive home and beauty business, adding that the majority of shareholders have backed the decision. 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." He stated, "At its core, this transaction creates two stronger, more focused businesses with an improved growth profile."
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 transformative deals. Mr Fernandez argued that no company has done so on similar deals since UK listing rules changed in 2024, making a vote non-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. However, Mr Fernandez argued that the two companies have a "significant alignment of values and culture." He noted, "Sustainability is an important pillar for McCormick also. Of course, we have to iron a lot of details in what will be the policies of McCormick in the future." 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 concluded.
