Chapter 1: What is the main topic discussed in this episode?
Welcome to Seeking Alpha's Wall Street Lunch, our afternoon update on today's market action, news, and analysis. Good afternoon. Today is Tuesday, March 31st, and I'm your host, Kim Kahn. Our top story so far, hot sauce meets mayo.
Chapter 2: What is the McCormick and Unilever deal about?
McCormick confirmed it reached an agreement to combine with Unilever's foods business, excluding India and other certain operations. The company say the deal will create a global flavor leader in high-growth categories with roughly $20 billion in combined full-year 2025 revenue.
Under the terms, Unilever and its shareholders are expected to receive shares representing 65% of the fully diluted combined company, equivalent to about $29.1 billion based on McCormick's one-month volume-weighted average price. Unilever also gets $15.7 billion in cash, subject to closing adjustments.
Those terms imply an enterprise value of about $44.8 billion for Unilever Foods, or about 13.8 times full-year 2025 EBITDA.
Chapter 3: How is Nvidia's investment in Marvell significant?
Upon closing, Unilever shareholders are expected to own 55.1% of the combined company, McCormick shareholders about 35%, and Unilever roughly 9.9% directly.
Chapter 4: How will the merger impact the global flavor market?
Unilever Foods portfolios include brands such as Knorr and Hellman's, which account for roughly 70% of sales. McCormick's brands include French's, Frank's Red Hot, Cholula, Stubbs, and Old Bay.
Chapter 5: What changes has JetBlue made to its checked bag fees?
Also in deal news, Appellus Pharmaceuticals is more than doubling after agreeing to be acquired by Biogen for $41 a share in a $5.6 billion transaction.
Chapter 6: What are the financial details of the McCormick-Unilever agreement?
Among active stocks, Marvel Technology is rallying after NVIDIA announced a $2 billion investment in the company. The two firms also unveiled a strategic partnership that will connect Marvel to NVIDIA's AI factory and AI-ran ecosystem through NVLink Fusion. Meanwhile, mainstream DDR5 16GB DRAM prices have declined 6% since Micron Technology reported earnings.
Citi cited softer pricing environments as it reduced its price target on Micron to $425 for 510. In other news of note, JetBlue Airways has raised check bag fees as it looks to offset soaring jet fuel costs driven by the war in Iran. Most economy passengers will now pay $39 to check one bag during off-peak periods, up from $35. The fee rises to $49 during peak travel periods.
A second check bag will cost $59, up from $50, and $69 during peak periods. As we experience rising operating costs, we regularly evaluate how to manage those costs while keeping base fares competitive and continuing to invest in the experience our customers value, JetBlue said in a statement.
Adjusting fees or optional services used by select customers, such as checked baggage, allows us to continue offering more competitive fares, the airline added. While we recognize that fee increases are never ideal, we implement changes only when necessary. And in the Wall Street Research Corner, BFA Securities lists the many pain trades traders didn't have on their bingo cards for Q1.
Among them are T-bills beating AI hyperscaler bonds, the US dollar beating Bitcoin, oil doing better than gold, and yield curve flatteners beating steepeners. Strategist Michael Hartnett says big corrections are always followed by big rallies. In the past 100 years, in 15 big corrections, with the S&P down 10-20%, the average three-month rally from lows has been 15%, he said.
But the index won't reach correction territory until it breaks below 6,300.
That's all for today's Wall Street Lunch. Look for links for stories in the show notes section. Don't forget, these episodes will be up with transcriptions at SeekingAlpha.com and join the elite community of real investors to unearth great investing ideas. Just head to SeekingAlpha.com slash subscriptions.
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