What's Happening?
McCormick & Co., a food flavorings and condiments company based in Hunt Valley, Maryland, plans to increase its ownership in McCormick de Mexico by acquiring an additional 25% stake from Grupo Herdez for $750 million. This move will raise McCormick's stake in the joint venture to 75%, enhancing its presence in the Mexican market and providing a platform for further expansion in Latin America. McCormick de Mexico, established in 1947, offers a range of products including mayonnaise, spices, marmalades, mustard, hot sauce, and tea under McCormick brands. The flagship product, McCormick Mayonesa con Jugo de Limones, is a popular kitchen staple in Mexico. Grupo Herdez will retain a 25% equity interest and continue to provide sales, distribution, and other services through its subsidiaries.
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Why It's Important?
The acquisition is significant for McCormick as it strengthens its position in the high-growth Mexican market, particularly in the condiments and sauces sector. With a strong brand presence and consumer loyalty, McCormick aims to leverage its global flavor expertise to drive further growth. The deal is expected to increase the net sales contribution of McCormick's condiments and sauces portfolio from 14% to 22%. For Grupo Herdez, the transaction allows continued participation in growth opportunities while preserving its market scale. The expanded ownership provides McCormick with a strategic platform to scale operations and distribution across Latin America.
What's Next?
McCormick and Grupo Herdez anticipate completing the transaction in early 2026, with McCormick financing the acquisition through cash on hand and debt. The deal is expected to enhance shareholder returns for Grupo Herdez as it moves forward with a portfolio reconfiguration. McCormick plans to build upon the strong results of McCormick de Mexico by leveraging combined expertise in category management, innovation, and marketing to expand in adjacent categories and increase channel penetration.
