McCormick Completes Acquisition of Controlling Interest in McCormick de Mexico

Rhea-AI Summary

McCormick (NYSE: MKC) completed acquisition of an additional 25% stake in McCormick de Mexico from Grupo Herdez, raising its ownership to 75% on Jan 2, 2026.

The purchase price was $750 million, funded with a combination of cash on hand and commercial paper. McCormick said the move strengthens its leadership in flavor, expands growth opportunities in Mexico and provides a platform for Latin America.

The company expects the transaction to be accretive to net sales, adjusted operating margin, and adjusted EPS in 2026, with minimal impact on Net Debt to Adjusted EBITDA. Fiscal 2026 guidance inclusive of the acquisition will be provided on the Jan 22, 2026 fourth-quarter earnings call.

Positive

• Increased ownership to 75%, gaining controlling interest
• Acquisition price of $750 million fully disclosed
• Expected to be accretive to adjusted EPS in 2026
• Provides strategic platform for expansion in Mexico and Latin America

Negative

• Purchase funded partly with commercial paper, increasing short-term debt reliance
• Integration and transaction costs excluded from adjusted metrics, creating near-term earnings uncertainty

Key Figures

Additional stake acquired 25% ownership interest Incremental stake in McCormick de Mexico from Grupo Herdez

Post-transaction ownership 75% ownership Resulting majority control of McCormick de Mexico

Purchase price $750 million Funded with cash on hand and commercial paper

Joint venture start 1947 Year McCormick de Mexico joint venture was formed

Partnership length 78 years Duration of partnership with Grupo Herdez cited in release

Accretive timing 2026 Expected accretion to net sales, adjusted margin and EPS

Market Reality Check

$67.28 Last Close

Volume Volume 1,550,131 is below the 20-day average of 2,635,532, suggesting a relatively muted pre-news trading session. low

Technical Shares at 68.11 are trading below the 200-day MA of 70.94, indicating a pre-existing weaker trend.

Peers on Argus

MKC was down 0.54% ahead of the announcement, while key packaged food peers like HRL (-0.88%), GIS (-0.21%), K (-0.02%), SJM (-0.52%) and KHC (-0.74%) also traded slightly lower, pointing to mild sector softness rather than a stock-specific move.

Historical Context

Date	Event	Sentiment	Move	Catalyst
Dec 22	Earnings date notice	Neutral	+0.5%	Scheduled announcement of Q4 2025 results and earnings call details.
Nov 18	Dividend increase	Positive	+2.5%	Quarterly dividend raised from $0.45 to $0.48 per share.
Oct 07	Q3 2025 earnings	Negative	-3.9%	Sales growth but margin contraction and reduced profitability outlook.
Sep 30	Dividend declaration	Positive	+1.3%	Declared $0.45 dividend, extending 101-year dividend payment streak.
Sep 09	Earnings date notice	Neutral	-1.5%	Set date and call details for reporting Q3 2025 results.

Pattern Detected

Recent history shows positive reactions to dividend announcements and negative reaction to profit-pressure earnings, with scheduling releases having modest impacts.

Recent Company History

Over the past few months, McCormick has highlighted steady capital returns and mixed profitability trends. Dividend actions on Sep 30, 2025 and Nov 18, 2025 drew positive price reactions, underscoring investor focus on income stability. The third-quarter 2025 report on Oct 7, 2025 showed sales growth but margin pressure, prompting a negative move. Today’s majority-stake expansion in McCormick de Mexico adds a strategic, growth-oriented acquisition to this backdrop ahead of the Jan 22, 2026 earnings call.

Market Pulse Summary

This announcement details McCormick’s purchase of an additional 25% stake in McCormick de Mexico for $750 million, lifting its ownership to 75%. Management expects accretion to net sales, adjusted operating margin, and adjusted EPS in 2026, with minimal impact on the Net Debt to Adjusted EBITDA ratio. Investors may watch upcoming 2026 guidance, integration progress in Mexico, and how this majority position supports broader Latin American expansion plans.

Key Terms

commercial paper financial

"McCormick funded the purchase price of $750 million through a combination of cash on hand and commercial paper."

Short-term IOUs issued by companies to raise cash quickly, sold to investors for a fixed, brief period (usually up to a few months) and repaid with interest at maturity. Think of it as a business borrowing from the public without putting up collateral, like a friend asking to borrow money for a few weeks with a promise to pay back a bit more. Investors watch commercial paper to gauge a company’s short-term funding health and credit risk; difficulty issuing it or rising yields can signal liquidity stress or higher perceived risk.

adjusted operating margin financial

"McCormick expects the transaction to be accretive to net sales, adjusted operating margin, and adjusted earnings per share in 2026."

Adjusted operating margin shows how much profit a company makes from its core business activities, after removing unusual or one-time costs and income. It helps investors see the company's true profitability by providing a clearer picture, similar to removing unexpected expenses to understand the regular performance. This metric is useful for comparing companies or tracking performance over time, as it highlights consistent earning power.

adjusted earnings per share financial

"McCormick expects the transaction to be accretive to net sales, adjusted operating margin, and adjusted earnings per share in 2026."

Adjusted Earnings Per Share shows how much profit a company makes for each share of stock, but it removes unusual or one-time items like big expenses or gains. This helps investors see the company's true ongoing performance, making it easier to compare how well different companies are doing over time.

net debt to adjusted ebitda ratio financial

"the transaction is expected to have minimal impact on McCormick's Net Debt to Adjusted EBITDA ratio."

Net debt to adjusted EBITDA ratio compares a company’s total borrowings minus cash on hand (net debt) with its recurring operating cash flow before interest, tax, depreciation and one‑time items (adjusted EBITDA). Think of it like how many years of steady earnings it would take to pay off the company’s net debt; lower numbers mean less leverage and usually lower credit and default risk, which matters for investors assessing balance‑sheet strength and valuation.

AI-generated analysis. Not financial advice.

HUNT VALLEY, Md., Jan. 2, 2026 /PRNewswire/ -- McCormick & Company Inc. (NYSE: MKC) (the "Company"), a global leader in flavor, today announced that it has completed the acquisition of an additional 25% ownership interest in McCormick de Mexico from Grupo Herdez, increasing its ownership to 75%. The Company previously announced its agreement to expand ownership in McCormick de Mexico on August 21, 2025.

The expanded ownership of McCormick de Mexico, a joint venture formed in 1947 with Grupo Herdez, strengthens McCormick's global flavor leadership, creates opportunities for further growth in the attractive Mexican market and provides a strategic platform for further expansion in Latin America. McCormick funded the purchase price of $750 million through a combination of cash on hand and commercial paper.

"We are excited to acquire majority ownership in McCormick de Mexico, further strengthening our track record of driving shareholder value through strategic acquisitions," said Brendan M. Foley, Chairman, President and Chief Executive Officer. "With the expanded ownership, we plan to build on McCormick de Mexico's strong performance by leveraging our combined expertise in category management, insight-driven innovation, and best-in-class marketing to expand in adjacent categories and increase channel penetration. We are proud of our 78-year partnership with Grupo Herdez and look forward to continuing our collaboration and shared success in the years ahead."

McCormick expects the transaction to be accretive to net sales, adjusted operating margin, and adjusted earnings per share in 2026. Adjusted operating margin and adjusted earnings per share exclude transaction and integration costs. Additionally, the transaction is expected to have minimal impact on McCormick's Net Debt to Adjusted EBITDA ratio. The Company will provide guidance for fiscal 2026, inclusive of the acquisition, on its fourth quarter earnings call on January 22, 2026.

Forward-looking Information

Certain information contained in this press release that are not statements of historical or current fact constitute "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934. These statements may be identified by the use of words such as "may", "will," "expect" "anticipate", "believe" and "plan." The forward-looking statements contained in this press release include, without limitation, statements related to: the expected impact of the acquisition of an additional 25% ownership interest in McCormick de Mexico, including among others, on McCormick's net sales, earnings performance and other financial measures, including the effect of transaction and integration costs; expectations regarding McCormick's condiment and sauces portfolio; McCormick de Mexico's growth potential, including brand marketing support, product innovation and customer, category, and channel expansion; expectations regarding expansion into Latin America; the realization of anticipated sales growth, adjusted operating margin expansion and adjusted earnings per share accretion from the acquisition; and the ability to create shareholder value through acquisitions.

These and other forward-looking statements are based on management's current views and assumptions and involve risks and uncertainties that could significantly affect expected results. Results may be materially affected by factors such as: risks associated with acquisitions generally, such as the failure to retain key employees of McCormick de Mexico; issues or delays in the successful integration of McCormick de Mexico's operations with those of McCormick; future levels of revenues being lower than expected and costs being higher than expected; failure or inability to implement growth strategies in a timely manner; unfavorable reaction to the acquisition by customers, competitors, suppliers and employees; conditions affecting the industry generally; local and global political and economic conditions; unexpected events or public health crisis; the effects of the increased levels of debt service following the McCormick de Mexico acquisition as well as the effects that such increased debt service may have on McCormick's ability to borrow or the cost of such additional borrowing, our credit rating, and our ability to react to certain economic and industry conditions; and other risks described in the company's filings with the Securities and Exchange Commission, including McCormick's Annual Report on Form 10-K for the year ended November 30, 2024 and Quarterly Reports on Form 10-Q for each of the quarters in the nine months ended August 31, 2025. Actual results could differ materially from those projected in the forward-looking statements. The company undertakes no obligation to update or revise publicly, any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by law.

About McCormick

McCormick & Company, Incorporated is a global leader in flavor. With over $6.7 billion in annual sales across 150 countries and territories, we manufacture, market, and distribute herbs, spices, seasonings, condiments and flavors to the entire food and beverage industry including retailers, food manufacturers and foodservice businesses. Our most popular brands with trademark registrations include McCormick, French's, Frank's RedHot, Stubb's, OLD BAY, Lawry's, Zatarain's, Ducros, Vahiné, Cholula, Schwartz, Kamis, DaQiao, Club House, Aeroplane, Gourmet Garden, FONA and Giotti. The breadth and reach of our portfolio uniquely position us to capitalize on the consumer demand for flavor in every sip and bite, through our products and our customers' products. We operate in two segments, Consumer and Flavor Solutions, which complement each other and reinforce our differentiation. The scale, insights, and technology that we leverage from both segments are meaningful in driving sustainable growth.

Founded in 1889 and headquartered in Hunt Valley, Maryland USA, McCormick is guided by our principles and committed to our Purpose – To Stand Together for the Future of Flavor. McCormick envisions A World United by Flavor where healthy, sustainable, and delicious go hand in hand.

To learn more, visit: www.mccormickcorporation.com or follow McCormick & Company on Instagram and LinkedIn.

For information contact:

Investor Relations:
Faten Freiha - faten_freiha@mccormick.com

Global Communications:
Lori Robinson - lori_robinson@mccormick.com

View original content:https://www.prnewswire.com/news-releases/mccormick-completes-acquisition-of-controlling-interest-in-mccormick-de-mexico-302651886.html

SOURCE McCormick & Company, Incorporated

FAQ

What stake did McCormick (MKC) acquire in McCormick de Mexico on Jan 2, 2026?

McCormick acquired an additional 25% interest, increasing its ownership to 75%.

How much did McCormick (MKC) pay for the additional stake in McCormick de Mexico?

The company paid $750 million, funded with cash on hand and commercial paper.

Will the McCormick (MKC) acquisition of McCormick de Mexico affect 2026 earnings?

McCormick expects the transaction to be accretive to net sales, adjusted operating margin, and adjusted EPS in 2026.

How will the acquisition impact McCormick's leverage metrics?

The company said the transaction is expected to have minimal impact on Net Debt to Adjusted EBITDA.

When will McCormick (MKC) provide 2026 guidance inclusive of the acquisition?

McCormick will provide fiscal 2026 guidance on its fourth-quarter earnings call on Jan 22, 2026.

What strategic benefits does McCormick (MKC) cite for buying majority ownership in McCormick de Mexico?

McCormick cited strengthened global flavor leadership, growth opportunities in Mexico, and a platform for Latin American expansion.