Colman’s Mustard, one of Britain’s best-known food brands, is being put up for sale as Unilever seeks to clear a potential regulatory obstacle to its planned £48bn combination with US spice maker McCormick.
Unilever has appointed Rothschild bankers to oversee the sale of Colman’s and its associated assets, according to people familiar with the matter. The decision reflects concerns that transferring the brand to McCormick could create competition problems because the US group already owns French’s Mustard.
The planned transaction would combine Unilever’s food business with McCormick to create a global food powerhouse, with brands including Marmite and other major Unilever food products expected to form part of the enlarged group.
Advisers to Unilever concluded that retaining Colman’s within the transaction could give competition authorities grounds to challenge the deal, given the overlap between Colman’s and French’s in the mustard market.
The UK Competition and Markets Authority and the US Federal Trade Commission are expected to scrutinise the wider transaction for potential anti-competitive effects. Divesting individual brands or business units is a common remedy when regulators identify competition concerns in large mergers.
By offering Colman’s separately, Unilever is seeking to address the issue before it threatens the broader transaction.
The sale would mark a significant change for a brand with unusually deep British roots. Colman’s traces its origins to 1814, when Jeremiah Colman, a flour miller, began grinding mustard seed at a watermill in Bawburgh, Norfolk.
A later member of the Colman family introduced the brand’s distinctive bull’s head logo, intended to convey both the mustard’s fiery strength and its association with British beef.
The company received a Royal Warrant from Queen Victoria in 1866, cementing its status as one of Britain’s best-known food manufacturers.
Colman’s remained part of Reckitt and Colman, once a major British consumer goods group, until Unilever acquired the brand in 2005.
Its identity has also become closely associated with Norwich. Colman’s signature yellow is reflected in Norwich City FC’s colours, while the company sponsored the football club’s shirts during the 1990s.
The prospect of the brand changing hands again has already prompted concern among analysts and consumer-goods observers, particularly given the possibility of another American owner.
Colman’s has never been owned outside Britain during its 212-year history, making a sale to an overseas buyer potentially significant for a brand that has become embedded in British food culture.
The planned disposal comes as Unilever seeks to separate its food operations into a larger business with McCormick, a transaction that would reshape the global packaged-foods industry.
The combined company would bring together some of the industry’s best-known brands, but the presence of two major mustard businesses under the same ownership would have presented an obvious regulatory challenge.
A Unilever spokesman confirmed the decision to sell.
“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.”
The sale process could therefore determine the future ownership of one of Britain’s most recognisable food brands, while allowing Unilever to pursue its much larger strategic transaction with fewer regulatory complications.
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