Unilever has agreed to combine its food business with US-based McCormick in a $44.8bn deal that will give the Marmite-to-Hellmann’s mayonnaise owner majority control of a food empire.

Under the agreement, McCormick will pay London-listed Unilever $15.7bn in cash and the equivalent of $29.1bn in shares for most of the Anglo-Dutch company’s food arm.

Unilever will control 65% of the new spin-off, which will combine brands such as Knorr and Pot Noodle with McCormick’s condiments and spices including French’s mustard, Old Bay seasoning and Cholula hot sauce.

However, the combined company will be led by McCormick executives, with senior management representation from the ranks of Unilever’s food business.

“We are unlocking trapped value through a growth-led separation of foods, creating a scaled, global flavour powerhouse,” said Fernando Fernández, the chief executive of Unilever. “Our retained ownership stake reflects our conviction in the strength of the combined company and its future prospects.”

After the combination, which is forecast to result in $600m (£453m) of annual cost savings by the end of the third year, McCormick will retain its name, global headquarters in the US and New York stock exchange listing, with an international headquarters in the Netherlands.

The new company is also planning a secondary stock listing in Europe to “reflect the global nature of Unilever’s current shareholder base”.

Unilever said that parts of its food business, such as its operation in India, would not be included in the new combined company, which has total annual revenues of about $20bn.

“Integrating two global organisations of this scale requires disciplined execution,” said Brendan Foley, the chief executive of McCormick. “We are confident that our detailed integration roadmap, experienced teams from McCormick and Unilever, external advisers and our strong partnership will enable us to capture the full value of this opportunity”.

The remainder of Unilever – which last year hived off its ice-cream division, the home of Ben & Jerry’s, Magnum and Wall’s – will focus on beauty, personal care and home products.

The cash-and-stock deal is being undertaken through a Reverse Morris Trust. This means it would be tax-free for US federal income tax for Unilever and its shareholders.

Shares in Unilever dipped by about 1% after the announcement of the deal, while McCormick fell by almost 1.5% in pre-market trading in the US. Unilever, which is valued at about £100bn, has implemented a three-month global hiring freeze amid the impact of the widening conflict in the Middle East.

The deal effectively means the maker of Dove soap and Tresemmé shampoo is now repositioned to compete directly with large household and personal care companies including L’Oréal, Beiersdorf and Estée Lauder.

It also marks the end of nearly a century of selling food products in competition against big rivals such as Kraft Heinz, Nestlé and PepsiCo. Knorr and Hellmann’s make up about 70% of Unilever Food total sales.

“For Unilever, this transaction is another decisive step in sharpening our portfolio and accelerating our strategy towards high-growth categories,” said Fernández.

In 2017, the company sold off its spreads business, which included brands such as Flora and I Can’t Believe It’s Not Butter!. Most of its tea business, including Lipton, PG Tips and Tazo, was sold in 2022, before last year’s listing of the ice-cream business.

Unilever has also disposed of brands including The Vegetarian Butcher and the healthy snacking brand Graze.