McCormick & Company Inc. (MKC) - Get McCormick & Company, Incorporated (MKC) Report said Wednesday that it has agreed to buy the food division of Britain's Reckitt Benckiser Group plc (RBGLY) for $4.2 billion.
The deal, which is expected to close in the third quarter, will add Reckitt's stable of French's mustard, Frank's Red Hot Sauce and Cattleman's BBQ Sauce to its condiments and spices group and is expected to lift McCormick's full-year proforma sales to around $5 billion, the company said. McCormick said it will fund the deal with both debt and equity financing and has a bridge loan agreement in place. However, while the group will retain its dividend, it will also curtain its share buyback program.
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