McCormick & Company, Incorporated (NYSE:MKC) is one of Jim Cramer’s stock calls as he discussed the impact of the Iran war on the markets. Cramer highlighted the Unilever deal as “huge.” The Mad Money host stated:
In a dead group like this, if you’re a major operator and you want to matter again, you gotta swing for the darn fences when something like this becomes available. McCormick’s not making a deal for some random collection of weak brands; it’s buying a set of premium assets that can transform its position in the category. And that is why I think the market’s missing the whole real story here… Honestly, the question is not whether the structure is messy. It is messy. The question is whether McCormick can create more value with these assets than Unilever could. And I think the answer to that is absolutely yes… One of the knocks on McCormick was that it was too domestically focused, and this is the most aggressive way for them to gain share overseas, where there’s still a lot of growth…
The Unilever food deal, it is so huge. McCormick’s balance sheet gets uglier and the structure is unusual. Very risky thing for a conservative company. Plus, it’s not expected to close until mid-2027, and regulators could take a hard look… So the market’s not wrong to worry about that. But after this kind of stock collapse, I think the worries are priced in. McCormick’s finally fallen enough to get interesting. Not safe or easy, but I like the deal…
Here’s the bottom line: In a market where the packaged food has been an absolute graveyard, right, I mean, the worst, the only real way out of, what you can possibly do is to try to get bigger, get more global, own more of the flavor aisle, cut costs, make yourself matter, make yourself relevant. These kinds of brands do not become available very often. McCormick took the shot. If Brendan Foley runs his business the way I think he can, this will eventually look a lot less like a food company overreaching and a lot more like the moment when McCormick decided to get big or go home because they’re done being at the mercy of the market.
Photo by Anna Nekrashevich on Pexels
McCormick & Company, Incorporated (NYSE:MKC) produces and sells spices, seasonings, condiments, and flavor products for consumers and food manufacturers.
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