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(Sharecast News) - Unilever and McCormick have reportedly instructed bankers to seek a buyer for iconic English mustard brand Colman's.
According to Sky News, which cited people close to the process, the disposal plan has been hatched because of McCormick's existing ownership of French's mustard.
One source told Sky the auction of Colman's - which was founded in 1814 by Jeremiah Colman at Stoke Holy Cross, near Norwich - had been initiated while competition regulators scrutinise the $44.8bn sale of Unilever's food operations to McCormick, which was announced in March.
It was understood that investment bank Rothschild has begun contacting prospective buyers with the opportunity to buy Colman's.
Sky said the brand's valuation was unclear on Thursday, although sources described it as "not material".
In a statement issued in response to an enquiry from Sky News, a Unilever spokesperson said: "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.
"Discussions are ongoing and the operations continue as usual."
Dan Coatsworth, head of markets at AJ Bell, said: "Corporate tie-ups such as Unilever's food arm and McCormick are rarely a case of bolting two businesses together and running everything as normal. It's natural to review the enlarged operations and to jettison anything deemed non-core.
"There is speculation that Unilever and McCormick have put Colman's mustard up for sale.
"Colman's is synonymous with a Sunday roast or a ham sandwich in the UK but is less known beyond these shores. McCormick might believe the British brand doesn't cut the mustard and add significant value to its portfolio. After all, McCormick already owns French's and a host of other mustard-related sauces and powders.
"There won't be a shortage of interested parties lining up to own the quintessential British brand, with Premier Foods and Associated British Foods likely to be in the frame as possible buyers."
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