Durex owner Reckitt Benckiser sells sauces business for $4.2bn

Reckitt said the proceeds of the deal will be used to reduce its net debt, after its USD17.90 billion purchase of United States baby formula maker Mead Johnson in February.

McCormick shares dropped 0.1 percent in New York Tuesday before the announcement and have gained about 4 percent this year.

McCormick president and ceo Lawrence Kurzius said: "The acquisition of Reckitt Benckiser Foods strengthens McCormick's flavour leadership with the addition of the iconic French's and Frank's RedHot brands to our portfolio, which will become our number two and number three brands, respectively".

More news: Karnataka Govt. wants State Flag, BJP calls move anti

The deal comes as speculation swirls about the next round of consolidation in the packaged-food business.

McCormick said it expected to achieve cost savings of about $50m by 2020 - but gave no further details. Last April, McCormick acquired Australia's Botanical Food Company, which makes the Gourmet Garden brand of packaged herbs.

The deal also strengthens McCormick's position in the foodservice market where Reckitt Benckiser foods' brands hold attractive positions across hot sauce, mustard, crispy vegetable and barbeque sauce sectors through the USA and Canadian foodservice channels.

More news: N.Korea vows to take 'corresponding measures' if United Nations adopts sanctions

McCormick anticipates that the hot sauce category will continue to see robust growth, and with insight-driven innovation and a passionate and increasing fan base, there are significant opportunities for expansion.

It gives McCormick, the maker of Lawry's, Old Bay and Billy Bee honey, a leading position in the USA condiments category.

McCormick dates to 1889, when founder Willoughby McCormick began selling flavors and extracts door to door. Morgan Stanley acted as lead financial adviser to Reckitt and the company also received advice from Robey Warshaw.

More news: Top Pope adviser arrives in Australia to face sex charges

The acquisition is contingent on customary approvals and is expected to close during the third or fourth quarter of McCormick & Co.'s fiscal 2017. Reckitt said the deal was on a cash free, debt-free basis, the proceeds from the sale would go towards cutting its debt.