McCormick to boost stake in Mexico venture to 75% with $750 million deal

McCormick & Company, the spice, seasoning, and sauce company based in the United States, announced on Thursday that it will acquire an additional 25% ownership stake in its long-standing joint venture with Grupo Herdez (HERDEZ.MX) in Mexico.

The $750 million purchase will increase McCormick’s stake in the company to 75% as it looks to expand its position in Latin America.

The transaction is likely to be completed in the early months of McCormick’s fiscal year 2026, the firm stated. Management stated that the purchase is expected to increase adjusted earnings per share within the first year of completion.

The deal demonstrates McCormick’s strategic focus on emerging economies, where consumer demand for packaged foods and branded condiments is growing in tandem with rising middle-class earnings.

Market reaction

The announcement sent Grupo Herdez shares higher on the Mexican Stock Exchange in early trading. The stock was up 25% at 8:45 a.m. local time (1445 GMT), temporarily triggering a move suspension due to the volatility.

The rally pushed the value of the company to a market cap of almost 23 billion pesos ($1.23 billion).

McCormick also reacted positively, with shares up nearly 1 in US trade. The response highlights investor faith in McCormick’s regional growth strategy and the potential value of taking full control of its Mexican assets.

A longstanding partnership

McCormick de Mexico, a joint venture between McCormick and Grupo Herdez, was founded in 1947 and has evolved to become a leading player in the condiments and sauces market in Mexico, Latin America’s second-largest economy.

The venture manufactures and markets a diverse range of McCormick-branded products, such as mayonnaise, mustard, ketchup, and spicy sauces, in addition to Grupo Herdez’s large portfolio.

The two corporations’ relationships have long been essential to their respective regional objectives.

For McCormick, the cooperation has acted as a door to the Latin American market, while Grupo Herdez has used it to extend its product range and strengthen its brand in Mexico.

Analyst perspective

Connor Rattigan, an analyst at Consumer Edge, said the move underscores global consumer goods businesses’ attitudes toward emerging countries.

“This is most likely not the end of the company’s ambitions for growth in the region,” he said, citing expanding middle-class populations as a crucial motivator.

He did, however, mention that restrictions on US consumer spending could provide a challenge for corporations attempting to balance international expansion with domestic success.

Deal conditions and outlook

McCormick added that the agreement is still subject to standard conditions and regulatory processes.

Upon completion, which is expected to happen next year, a larger ownership base will provide McCormick with enhanced operational control and a greater share of profits from one of its rapidly growing international markets.

The deal offers Grupo Herdez massive liquidity while holding a minority stake in a still-strategic business. Its share price increase is a strong indication that the investors believe that this will create value.

For McCormick itself, the deal represents the biggest single bet so far on the future of Latin America as a consumer market.

Holding a majority interest in McCormick de Mexico, the company is setting itself up to gain more scale and profitability in a part of the world where branded condiments are becoming more routine items of everyday consumption.

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