Unilever PLC ( UL ) is reportedly evaluating a potential separation of its food business and has entered discussions with McCormick & Company Incorporated ( MKC ) , marking a significant strategic shift toward its higher-growth beauty and personal care segments.

Unilever ( UL ) confirmed that it has received an inbound offer for its ‘highly attractive’ Foods business and is in discussions with McCormick ( MKC ).

Deal Could Materialize Within Weeks

The company confirmed it has received an inbound offer for its Foods division and is currently in talks with McCormick ( MKC ) regarding a possible transaction.

However, both companies cautioned that there is no certainty that a deal will materialize or on what terms.

The Wall Street Journal on Friday highlighted that Unilever ( UL ) is pursuing a major strategic shift that would further streamline its portfolio, aligning with a broader industry trend of breaking up large consumer conglomerates.

An all-stock transaction could be announced within weeks, the WSJ reported, citing people familiar with the matter, though deal structure details remain unclear and discussions could still collapse.

In recent years, Unilever ( UL ) has actively evaluated strategic options. It previously made an unsolicited bid for GlaxoSmithKline’s consumer health unit in 2021 but abandoned the effort in 2022.

Unilever ( UL ) in Early-Stage Talks And Strategic Review

Citing people familiar with the matter, the Bloomberg report on Wednesday indicated that Unilever ( UL ) is in the early stages of reviewing options for its food portfolio.

These include a full or partial separation, or retaining select high-performing brands while divesting others.

The discussions could result in an all-stock transaction, though details remain unclear. Any potential deal may still be years away, with some indications suggesting no transaction before 2027.

Unilever ( UL ) noted that its board continues to view the Foods business as a strong, attractive unit with leading brands and solid financial performance.

Unilever Focus Shifts Toward Beauty And Personal Care

The potential move aligns with CEO Fernando Fernandez’s strategy to sharpen focus on beauty, personal care, and wellbeing categories. The company has increasingly prioritized these segments as part of a broader effort to streamline operations.

Fernandez previously indicated that large-scale acquisitions are not currently under consideration, emphasizing instead smaller, targeted deals to strengthen core segments.

Industry Trend Toward Simplification

Unilever’s review reflects a broader trend among consumer conglomerates to simplify complex portfolios.

In recent years, several companies have moved away from sprawling structures to concentrate on higher-margin, faster-growing categories.

The company has already taken steps in this direction, including spinning off its ice cream business last year into Magnum Ice Cream, which houses brands such as Ben & Jerry’s and Breyers.

McCormick Evaluates Strategic Opportunity

McCormick ( MKC ) confirmed it is actively engaged in discussions and continues to evaluate strategic opportunities consistent with its goal of maximizing shareholder value.

The company added that it will not provide further updates unless disclosure becomes necessary, underscoring the preliminary nature of the talks.

Price Action: Unilever ( UL ) shares were up 1.48% at $62.42 during premarket trading on Friday, according to Benzinga Pro data. McCormick ( MKC ) shares were up 3.68% at $56.04.