Unilever will not get Reckitt Benckiser's food division


The FTSE 100 gained 0.1 percent, with household goods and food sectors boosting the index while miners weighed.

The BBC says the sale will "pay off debt" taken on to complete the Mead Johnson deal.

Inc. entered into an $4.2 billion agreement to acquire Reckitt Benckiser's Food Division.

For Reckitt Benckiser, unloading the products continues an overhaul that began with an expansion into baby formula through the British company's acquisition of Mead Johnson Nutrition Co. for $16.6 billion.

The purchase will make McCormick one of the largest US condiment makers, adding the iconic French's mustard and Frank's RedHot brands to a portfolio comprised of its line of spices, seasoning mixes and condiments. It will also enable it to focus more closely on its consumer health and home brands, which include Durex condoms and Mucinex cold medicine.

Reckitt Benckiser's food division generated a 411 million pound (465 million euro) turnover previous year and McCormick forecasts up to 50 million dollars (43.3 million euro) in synergies. Last year, grocery chain Loblaw set off a firestorm when it yanked French's ketchup from the shelves, a move that favoured US -made Heinz.

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Royal Bank analysts said it "feels to us like a very high price for a USA oriented ambient food business".

Reckitt shares were up 1.3 percent at 0830 GMT.

McCormick projects robust growth that the hot sauce category is experiencing would continue. The two businesses combined will have approximately $5 billion in sales.

With the acquisition of Reckitt Benckiser's food division, McCormick is adding a roster of brands to its spice and seasoning mix portfolio that further strengthens the company's position as a go-to destination for adding flavor to a variety of dishes.

Credit Suisse is advising McCormick on the deal, while Cleary Gottlieb Steen & Hamilton LLP is the legal counsel.

The acquisition is contingent on customary approvals and is expected to close during the third or fourth quarter of McCormick & Co.'s fiscal 2017.