McCormick buys Reckitt Benckiser's food business

U.S. spice maker McCormick & Company is buying the maker of French's mustard and other condiments in a $4.2 billion cash deal that it regards as a "perfect match."

The Maryland-based company fought off rival bidders to purchase the Reckitt Benckiser food business. The deal, disclosed Tuesday, will create a combined group with annual sales of around US$5 billion.

French's and Frank's RedHot brands will become McCormick's No. 2 and 3 brands, respectively.

"RB Foods' focus on creating products with simple, high-quality ingredients makes it a perfect match for McCormick as we continue to capitalize on the growing consumer interest in healthy, flavourful eating," said Lawrence E. Kurzius, McCormick's CEO.

The deal is part of RB's strategy to re-focus on consumer health and hygiene products after it bought U.S. baby formula maker Mead Johnson. The company's brands include Nurofen, Woolite and Clearasil.

Reckitt's food business is headquartered in Chester, N.J. The company employs 450, including some 360 in Springfield, Missouri.

McCormick said it wanted to strip out around $50 million in cost "synergies" after the takeover, the majority of which would be achieved by 2020.