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HUNT VALLEY - McCormick & Company Inc. (NYSE:MKC) announced Thursday it has signed a definitive agreement to acquire an additional 25% ownership interest in McCormick de Mexico for $750 million, increasing its stake to 75%.
The transaction, which is subject to customary closing and regulatory conditions, is expected to be completed in early fiscal 2026 and will be financed through a combination of cash and debt. With a moderate debt-to-equity ratio of 0.8 and current total debt of $4.45 billion, McCormick maintains reasonable leverage for such strategic expansions.
McCormick de Mexico, a joint venture formed in 1947, generates approximately $810 million in annual net sales, with mayonnaise being its flagship product. The company holds market leadership positions in several high-growth categories in Mexico. For deeper insights into McCormick’s growth strategy and detailed financial analysis, including exclusive Fair Value estimates and growth projections, visit InvestingPro, where you’ll find comprehensive research reports and expert analysis.
"This marks the beginning of an exciting new chapter for McCormick in Mexico. With this expanded ownership, we will advance our global flavor leadership and increase our presence in condiments and sauces," said Brendan M. Foley, Chairman, President, and Chief Executive Officer of McCormick. The company has demonstrated solid profitability with a gross margin of 38.5% and return on equity of 14% over the last twelve months.
The acquisition represents approximately 12 times 2025 EBITDA and annual recurring management fees. McCormick expects the transaction to be accretive to net sales, adjusted operating margin, and adjusted earnings per share in the first year.
Following the close, McCormick’s global condiments and sauces portfolio will increase from 14% to 22% of the company’s net sales. McCormick views the transaction as a strategic platform for further expansion in Latin America.
Héctor Hernández-Pons Torres, Chairman and CEO of Grupo Herdez, which will retain a 25% stake in the joint venture, said, "We are proud of the nearly 80 years of productive partnership we have built with McCormick, and this transaction marks an exciting evolution of our relationship."
Goldman Sachs and Creel are serving as financial advisor and legal counsel, respectively, to McCormick in connection with the transaction, according to the company’s press release.
In other recent news, McCormick & Company reported its second-quarter earnings for 2025, revealing adjusted earnings per share of $0.69, which exceeded analysts’ expectations of $0.66. The company met revenue expectations with $1.66 billion, showcasing strong performance in its Consumer segment with over 3% growth in volume and mix. UBS maintained its Neutral rating and $83.00 price target, noting McCormick’s earnings beat was driven by lower selling, general, and administrative expenses. Meanwhile, Bernstein SocGen Group raised its price target for McCormick to $102.00 from $101.00, citing solid second-quarter results and maintained full-year guidance despite tariff concerns. JPMorgan upgraded McCormick’s stock from Underweight to Overweight, increasing the price target to $83.00, highlighting an attractive entry point after recent share pullbacks. TD Cowen, however, lowered its price target to $82.00 from $85.00, maintaining a Buy rating but adjusting its earnings per share estimate due to anticipated tariff impacts. These developments reflect a mixed but largely positive outlook from analysts on McCormick’s growth prospects and strategic initiatives.
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