London — US spice maker McCormick has won the battle to buy Reckitt Benckiser Group’s North American food business, paying a higher than expected $4.2bn to add extra seasonings and sauces. London-listed Reckitt said in April it was reviewing options for the unit, which includes French’s mustard and Frank’s RedHot sauce, to cut its debt following the $16.6bn purchase of baby-formula maker, Mead Johnson. The sale, announced late on Tuesday, will reduce Reckitt’s net debt to earnings before interest, tax, depreciation and amortisation (EBITDA) ratio to 3.3 times from 4.1 times. It will also enable it to focus more closely on its consumer health and home brands, which include Durex condoms and Mucinex cold medicine. It gives McCormick, the maker of Lawry’s and Old Bay seasonings and Billy Bee honey, a leading position in the US condiments category. At $4.2bn, the price represents a multiple of more than seven times the annual sales from the business and 20 times its EBITDA. This is much...
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