Unilever cuts the mustard with Colman’s sale

Unilever has put 200-year-old English mustard brand Colman’s up for sale as it seeks to head off competition fears over its food business spin-off.

The FTSE 100 firm is combining its food brands – also including Marmite and Hellmann’s – with US spice giant McCormick in a £33billion deal.

But McCormick already owns rival mustard brand French’s, a fact that could attract the attention of regulators.

Investment bankers at Rothschild have now been instructed to look for a buyer for Colman’s.

Experts speculated that potential bidders will include Mr Kipling owner Premier Foods and Associated British Foods, which owns Twinings tea and Ryvita.

A Unilever spokesperson said: ‘A decision has been taken to market the Colman’s brand and assets to potential buyers in order to proactively seek to address potential competition concerns from the planned combination of Unilever Foods and McCormick.

‘Discussions are ongoing and the operations continue as usual.’

It is unclear how much Colman’s could be worth, although a source told Sky News it was ‘not material.’

The brand has previously been subject to speculation that it could be offloaded by Unilever along with fellow British condiments Marmite and Hellmann’s. Together, the three have annual revenues of around £200million.

Dan Coatsworth, head of markets at AJ Bell, said: ‘McCormick already owns French’s and a host of other mustard-related sauces and powders. Colman’s is synonymous with a Sunday roast or a ham sandwich in the UK but is less known beyond these shores. McCormick might believe the British brand doesn’t cut the mustard and add anything to its portfolio.

‘There won’t be a shortage of interested parties lining up to own the quintessential British brand, with Premier Foods and Associated British Foods likely to be in the frame as possible buyers.’

Colman’s was founded in Norwich in 1814 but in 2017 production was shifted to plants in Burton-on-Trent and Germany.

Earlier this year, Unilever chief executive Fernando Fernandez gave little reassurance on the question of whether the McCormick deal would hit jobs at the group’s 6,000-strong UK workforce.

He has said the company would see ‘synergies play out’ when it came to the future of manufacturing in Britain, raising the prospect of cuts.

Fernandez has come under pressure from critics over the deal.

Veteran fund manager Terry Smith, who sold his entire stake in Unilever earlier this year, has said it has ‘all the hallmarks’ of activist investor Nelson Peltz.

Peltz – who has been on the Unilever board since 2022 – is reported to have been a key advocate of the spin-off. He has previously agitated for change at companies including Cadbury and PepsiCo.

Others in the City complain that investors cannot vote on the tie-up.