Unilever to Sell Colman's Mustard Brand Amid Food Business Merger

Unilever has initiated the sale of its 200-year-old English mustard brand, Colman’s, according to reports.

This decision comes as Unilever prepares to merge its food brands, including Marmite and Hellmann’s, with American spice company McCormick in a transaction valued at £33 billion. The inclusion of Colman's in this deal could raise regulatory scrutiny, as McCormick already owns the rival mustard brand French's.

To mitigate potential competition issues, Unilever has instructed investment bankers at Rothschild to find a buyer for Colman’s. While the exact valuation of the Colman's brand is not publicly disclosed, a source indicated to Sky News that its financial contribution is not material to Unilever's overall business.

Speculation about potential buyers includes Premier Foods, the owner of Mr Kipling cakes, and Associated British Foods, which holds brands such as Twinings tea and Ryvita. Analysts suggest these companies are likely to express interest in acquiring the quintessential British condiment brand.

Colman's, founded in Norwich in 1814, saw its production shift in 2017 to facilities in Burton-on-Trent and Germany. The brand, along with Marmite and Hellmann's, collectively generates annual revenues of approximately £200 million.

Unilever chief executive Fernando Fernandez has faced pressure regarding the potential impact of the McCormick deal on the company's roughly 6,000-strong UK workforce. Fernandez has spoken of anticipating "synergies" from the merger, leading to concerns about potential job reductions in the UK.

The broader deal has also drawn attention from investors. Veteran fund manager Terry Smith, who has divested his stake in Unilever, has drawn parallels between the current situation and the tactics of activist investor Nelson Peltz. Peltz, a member of Unilever's board since 2022, is reportedly a proponent of the food business spin-off and has previously influenced changes at companies like Cadbury and PepsiCo. Some investors have also voiced concerns about the lack of voting rights on the proposed tie-up.