Unilever chief executive Fernando Fernández has defended plans to combine the group’s food business with US spice and sauce maker McCormick, insisting the consumer goods giant cannot afford to move slowly.

The deal would see Unilever’s food brands, including Marmite and Hellmann’s, merged with McCormick to create a food business valued at around $66bn.

Fernández has faced criticism from some investors over the plan, which comes soon after Unilever separated its ice cream division, now listed in Amsterdam as the Magnum Ice Cream Company.

Speaking at a Deutsche Bank conference, Fernández said Unilever had long been seen as “slow and complex” and pushed back against suggestions that the business was moving too quickly.

“People say, are you under the risk of change fatigue?” he said. “I’m not paid to be lazy. Our people are not paid to be lazy.”

He added: “Neither the board nor the leadership team was prepared to kick the can down the road or leave the issues to be sorted out later.”

Unilever said the McCormick tie-up would create a food giant with annual revenues of around $20bn. Under the proposed deal, Unilever and its shareholders would own 65 per cent of the combined group, while McCormick investors would hold the remaining 35 per cent.

Unilever is expected to receive $15.7bn in cash, which it plans to use to support €6bn of share buybacks over the next three years.

However, investors have raised concerns over the structure of the deal, the debt level of the new company and further disruption inside Unilever after several years of restructuring.

Unilever’s share price has not recovered from the 7 per cent fall that followed the March announcement, while McCormick’s stock has also come under pressure since the deal was unveiled.

Veteran fund manager Terry Smith recently sold his Unilever stake, accusing the group of giving in to pressure from activist investor Nelson Peltz, who joined the board in 2022 and has pushed for a break-up of the conglomerate.

Smith previously criticised Unilever in 2022 for focusing too heavily on the “purpose” of its brands, including Hellmann’s mayonnaise.

Flossbach von Storch portfolio manager Michael Illig, whose firm is a top 30 Unilever shareholder, said the deal risked bringing another round of uncertainty after years of change.

“While hard to quantify, it just brings some uncertainty until mid-2027,” he said. “From the outside it is hard to judge the threshold at which too much change causes damage to employee morale and execution.”

Bernstein analysts said some Unilever investors were uneasy about owning shares in a highly indebted food business and questioned whether the new company would be able to reduce leverage within two years of completion.

Fernández, who became chief executive after serving as finance chief, has been pushing through a more aggressive overhaul of Unilever as he shifts its focus towards beauty and personal care.

“Great companies perform and transform simultaneously,” he said.

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