JPMorgan warns that Unilever’s planned sale of its food division to McCormick may disappoint investors due to execution risks and high costs associated with the deal. The proposed “reverse Morris Trust” transaction would see Unilever shareholders receive shares in a new company while the company itself receives around €12 billion in cash, leaving it with a smaller balance sheet. Analysts estimate tax leakage of around €4 billion, as well as significant dis-synergy costs and lost efficiencies from separating the business, outweighing estimated synergies on McCormick’s side. This deal may also limit Unilever’s financial firepower for future acquisitions at a time of heightened uncertainty in emerging markets.
Source: https://uk.finance.yahoo.com/news/unilevers-mccormick-deal-flatters-deceive-114900376.html