McCormick adds mustard, hot sauce to spice rack

Ingredients maker McCormick & Co. said Wednesday it had reached a deal to acquire the food division of the company that makes French’s Mustard and Frank’s RedHot hot sauce.

McCormick will pay $4.2 billion for British consumer goods maker Reckitt Benckiser’s food unit, bolstering its condiments offerings. The combined company will have full-year 2017 sales of about $5 billion.

Reckitt’s products in hot sauce, mustard, crispy vegetables and barbecue sauce were the sweetener that attracted McCormick.

McCormick, known for its spices, seasoning mixes and other condiments, said it wants to make Frank’s RedHot the top global brand in the hot sauce category.

The company said the deal would allow it to shed $50 million in annual costs.

The deal is expected to be finalized in McCormick’s fiscal fourth quarter.

“We have great respect for RB Foods and the strong business its employees have built,” McCormick CEO Lawrence Kurzius said in a statement. “McCormick will be able to grow these brands in new and unique ways through McCormick will pay $4.2B for U.K.-based Reckitt Benckiser, maker of French’s Mustard. our proven track record of insight-driven innovation and the ability to leverage our global footprint. We are confident McCormick is the perfect home for RB Foods’ popular brands and employees.”

The French’s, Frank’s RedHot and Cattlemen’s brand names will be maintained, McCormick said.

McCormick’s stock fell more than 5% Wednesday, closing at $92.07 per share. Reckitt shares traded in London rose 1.5%.