Unilever might be splitting up

Unilever is on a self-care journey, swapping snacks for serums.

The $140 billion consumer conglomerate is contemplating selling its food business, worth roughly $33 billion, to spice-maker McCormick, worth around $14.5 billion.

The move would pull Unilever out of direct competition with packaged food leaders like Kraft, Heinz, and Nestlé, allowing it to to double down on its beauty, personal care, and home products—positioning it directly against beauty players such as Estée Lauder and L’Oréal. For McCormick, the transaction would mark the largest deal in company history.

While the companies aim to reach an agreement by month’s end, the deal may take longer to close given the scale mismatch, which adds complexity to the transaction.

The spinoff strategy

This is the latest step in a broader dismantling of Unilever’s food empire. The company has already exited several categories, including tea, spreads, and smaller food brands, and it spun off its ice cream unit last year.

The strategy reflects a deeper shift in consumer behavior: Demand is moving away from heavily processed foods and toward fresher and higher-protein options, trends accelerated by the popularization of weight loss drugs. At the same time, consumers continue to splurge on premium beauty and self-care products.

For Unilever, that means reallocating capital away from slower growth food segments and doubling down on higher-margin personal care products. Unilever’s management aims to generate about two-thirds of revenue from core brands like Dove, Liquid I.V., and Dermalogica, up from roughly half today.

What does this mean for investors?

While diversification once drove growth and scale was the priority, that’s now becoming a burden, as large, complex portfolios become harder to manage. Breakups were once seen as a way for companies to dump weaker assets, but that sentiment has shifted, and investors increasingly favor spinoffs because simpler businesses are easier to understand and value. In fact, a basket of recent US spinoffs including Sandisk, Qnity Electronics, and GE Vernova has outpaced the S&P 500 by the widest margin since 2020 in the first quarter of 2026, according to Bloomberg.

Some companies are taking advantage of this shift in sentiment: Madison Square Garden Sports is exploring a split between the Knicks and Rangers, Trump Media is considering spinning off with assets like Truth Social, and Honeywell is planning to separate its aerospace unit in Q3 to capitalize on strength in the sector.

That said, spinoffs have downsides, too: Smaller, newly independent companies can lose inclusion in major indexes, reducing demand from institutional investors. In some cases, parent companies also load spinoffs with debt, which can weigh on performance post-separation.

For Unilever, the move points to a clearer sense of direction, and a lesson for management teams: bigger may not always be better.—SY