Hellmann’s maker Unilever has said it is in late-stage talks to merge its food business with a US rival in a deal worth around 15.7 billion US dollars (£11.9 billion).
The consumer goods giant also confirmed it was temporarily freezing recruitment in a bid to rein in costs amid the global turbulence caused by conflict in the Middle East.
Unilever told investors that it was in advanced discussions with McCormick & Company, which makes Cholula hot sauce and French’s mustard among its range of spices and seasoning brands.
A deal is likely to involve merging Unilever’s food business with McCormick for about 15.7 billion dollars (£11.9 billion) of cash upfront and equity in McCormick.
This would mean Unilever and its shareholders hold 65% of the combined company once a sale completes.
Unilever said it is possible that an agreement could be reached today, but that there was no certainty over a sale.
The company also said it was pausing hiring, with reports linking the move to the war in Iran driving up costs across supply chains.
A spokesperson for Unilever said: “Reflecting the uncertain external environment, we have decided to put in place a temporary pause on our recruitment.
“We remain an agile business and will always adjust our plans as necessary.”
Any deal for the food unit would mark a significant overhaul for the multinational business which owns household-name food brands including Hellmann’s, Colman’s and Marmite.
Selling the food business would leave it with a collection of major beauty, personal and home care labels such as Dove, Radox, Vaseline and Persil.
Beauty and wellbeing brands have been selling particularly well in recent months, according to its latest results.
Last year, the group spun off its ice cream business to create the Magnum Ice Cream Company, which it floated with a primary listing in Amsterdam and secondary listings in New York and the UK.
It has also sold off a number of food brands, including snacking business Graze and plant-based brand The Vegetarian Butcher, in recent years.
On the other hand, it has sought to grow its personal care business over the past year with deals to acquire the fast-growing Wild and Dr Squatch brands.
Derren Nathan, head of equity research at Hargreaves Lansdown, said the potential deal would include an upfront payment “but would be mainly settled in McCormick shares”.
“Compared to beauty products, the division has been a drag on growth in recent years, but it may seek to hold onto some of the jewels in the food business crown, such as the faster-growing Indian market,” he said.