The anticipated big deal happened overnight. McCormick & Co. this morning (March 31) announced it has struck a deal to combine itself with Unilever's foods business to create a global company with approximately $20 billion in sales.

From the looks of things, McCormick will remain the surviving company and will maintain its stock listing and its headquarters in Hunt Valley, Md., although it will add a European headquarters in Netherlands, Unilever Foods’ stronghold. But Unilever shareholders will own 55.1% of the company, making them the majority owners, an important consideration for minimizing taxes.

Under the terms of the agreement, Unilever and its shareholders are expected to receive shares equating to 65% of the combined-company’s equity, equivalent to $29.1 billion. Unilever itself will receive $15.7 billion in cash, subject to certain closing adjustments.

After closing of the transaction, Unilever shareholders are expected to own 55.1%, McCormick’s current shareholders will own 35.0% and Unilever Plc will maintain 9.9% of the new company.

That makes for a total value of this deal of about $44.8 billion, the enterprise value for Unilever Foods. The figures also imply a valuation for McCormick of approximately $21.0 billion. The deal does not include Unilever’s food business in India, Nepa and Portugal; its Lifestyle & Nutrition business; its Buavita business; and its Lipton ready-to-drink business.

Although it sounded like McCormick initiated the discussions, Unilever’s food business, at $15 billion in sales, is more than twice the size of all of McCormick ($6.7 billion in sales).

Brendan Foley is expected to remain chairman, president and CEO of McCormick, and Marcos Gabriel is stay on as executive vice president and chief financial officer. Executives from both companies will serve in key leadership roles. Unilever will appoint four of 12 members of the combined company’s board of directors. One of them will be a Unilever executive to support the integration.

Foley said in a call with investment analysts that McCormick had been thinking about a potential deal with Unilever’s food business for “a number of years.” The official announcement noted, “The Unilever Foods business is one we have long admired, with a portfolio that complements our existing business, capabilities and long-term vision.

“The combination brings together two industry-leading organizations with complementary global footprints and portfolios of iconic brands across herbs, spices, seasonings, cooking aids, condiments and sauces,” the announcement continued. “The combined company is expected to benefit from expanded global reach, enhanced scale across retail and foodservice channels and greater resources to invest in innovation, brand-building and global distribution.”

Today’s announcement called the Unilever Foods assets – Hellmann’s mayonnaise and Knorr dehydrated soup and meal mixes, bouillon cubes and condiments – a highly complementary fit with McCormick's portfolio, which includes McCormick spices and seasonings, French's mustard and Frank's RedHot and Cholula hot sauces. And while Hellmann's is the leading mayonnaise in the world, McCormick mayonnaise is No. 1 in Mexico.

As we reported just yesterday, a deal looked likely to happen soon as a a tax-free spinoff of the Unilever business followed by a merger. Unilever for a while has been hinting that it would like to divest its food business to concentrate on Beauty & Wellbeing and Personal Care. The two companies on March 20 confirmed they were in talks about a combination, although no details were given at that time.