By Yadarisa Shabong, Neil J Kanatt and Savyata Mishra

March 20 (Reuters) - Spice maker McCormick ( MKC ) has built a reputation as a savvy acquirer in the past decade, turning brands like Frank's RedHot and French's mustard into growth drivers that now account for a sizeable chunk of its $6.8 billion in annual sales, analysts say.

McCormick's ( MKC ) next trick would be its most ambitious yet. 

The company is in talks with Unilever ( UL ) about a potential deal for the British company's food business, valued by Barclays analysts at more than $30 billion.

That includes Hellmann's mayonnaise and Knorr bouillon - multi-billion-dollar brands that would significantly expand McCormick's ( MKC ) global presence in condiments and cooking aids.

McCormick ( MKC ) purchased Frank's and French's in a $4.2 billion deal for Reckitt's North American food business in 2017.

Cholula hot sauce followed in 2020 in an $800 million acquisition from private equity firm L Catterton. The company holds leading brands in spices, seasoning, hot sauce and mustard. 

EXECUTION IS KEY

McCormick ( MKC ), whose $14.5 billion market capitalisation is far smaller than Unilever's ( UL ) foods business, will first have to finance the deal. The two companies gave no clues on how any deal might be structured, confirming ongoing talks but providing no financial details.

But acquiring brands to grow its own portfolio is a tried and tested strategy, and a deal to combine with Unilever's ( UL ) food business, which also includes historic ​British brands such as Colman's and Marmite, would make strategic sense, analysts say.

"(McCormick ( MKC )) has demonstrated an interest in expanding its emerging market exposure and extending its category perimeter. Indeed, it has often used M&A to accomplish these priorities,"  said BNP Paribas analyst Max Gumport.

Chris Beckett, consumer staples analyst at Quilter Cheviot, cited French's mustard and Frank's RedHot Sauce as examples of McCormick's ( MKC ) success, adding, "they've done well with the brands that they've acquired". 

The question now is whether McCormick ( MKC ) can repeat those successes with more global brands. 

"I think it's possible, but not as easy as before," said Natalia Glushchenko, director of revenue growth management at Vibrant Ingredients, which works with consumer packaged goods players including McCormick ( MKC ). "The market is tougher now: costs are more volatile, consumers are more price-sensitive, and retailers are pushing harder on margins. Execution will matter a lot more."