McCormick Unilever 44.8B deal

0:00Welcome to Seeking Alpha's Wall Street Lunch, our afternoon update on today's market action news and analysis. Get afternoon, today's Tuesday March 31st, and I'm your host, Kim Kahn. Our top story so far, hot sauce meets mayo. McCormick confirmed it reached an agreement to combine with Unilever's foods business, excluding Indian and other certain operations. The companies say the deal will create a global flavor leader in high-growth categories with roughly $20 billion in combined, full-year 2025 revenue. Under the terms Unilever and its shareholders are expected to receive shares representing 65% of the fully deluded combined company, equivalent to about $29.1 billion based on McCormick's one-month volume-weighted average price. Unilever also gets $15.7 billion in cash subject to closing adjustments. This terms imply an enterprise value of about $44.8 billion for Unilever foods, or about 13.8 times full-year 2025 EBITDA.

1:03Upon closing, Unilever shareholders expected to own 55.1% of the combined company, McCormick shareholders about 35% and Unilever roughly 9.9% directly. Unilever food portfolios include brands such as Nore and Helmonds, which account for roughly 70% of sales. Cormick's brands include Frenches, Frank's Red Hot, Chalula, Stubbs, and Old Bay. Also in deal news, a palace pharmaceuticals is more than doubling after agreeing to be acquired by buy-agent for $41 a share in a $5.6 billion transaction. Among active stocks, Marvel Technology is rallying after Nvidia announced a $2 billion investment in the company. The two firms also unveiled a strategic partnership that will connect Marvel to Nvidia's AI factory and AI-RAN ecosystem through NVLink Fusion. Meanwhile, mainstream DDR5-16GB DRAM prices have declined 6% since Micron Technology reported earnings. City cited softer pricing environments as it reduced its price target on Micron to

2:05$425 from 510. In other news of note, JetBlue airways has raised check-bag fees as it looks to offset soaring jet fuel costs driven by the war in Iran. Most economy passengers will now play $39 to check one bag during off-peak periods up from 35. The fee rises to 49 during peak travel periods. A second check-bag will cost $59 up from 50 and 69 during peak periods. As we experience rising operating costs, we regularly evaluate how to manage those costs while keeping base fairs competitive and continuing to invest in the experience our customers value. JetBlue said in the statement, adjusting fees or optional services used by select customers such as checked baggage allows us to continue offering more competitive fairs the airline added. While we recognize that fee increases are never ideal, we implement changes only when necessary. And in the Wall Street research corner, BFA securities listed many pain trades traders didn't have on their bingo cards for Q1.

3:06Among them are T-bills beating AI hyper-scaler bonds, US dollar beating Bitcoin, oil doing better than gold and yield curve flateners beating steepeners. Strategist Michael Hartnitz says big corrections are always followed by big rallies. In the past 100 years, in 15 big corrections with the S&P down 10-20%. The average 3-1th rally from Lowe's has been 15% he said. But, the index won't reach correction territory until it breaks below 6300. That's all for today's Wall Street lunch. Look for links for stories in the shownet section. Don't forget, these episodes will be up with transcriptions at SeekingAlpha.com slash WS&E and join the elite community of real investors to unearth great investing ideas. Just head to SeekingAlpha.com slash subscriptions.