McCormick & Company, Incorporated (NYSE:MKC) signed a definitive agreement to acquire French’s Food companies and Tigers Milk LLC (Food business) from Reckitt Benckiser LLC and The R.T. French's Food Group Limited for $4.2 billion on July 18, 2017. The purchase price is on a cash-free, debt-free basis and subject to certain customary adjustments. The transaction includes brand like French's, Frank's RedHot, Cattlemen's and Tiger's Milk. Upon completion, McCormick will integrate RB Foods into its Consumer and Industrial segments and will retain the brand names of French’s, Frank’s RedHot and Cattlemen’s®. McCormick has obtained committed bridge financing and expects to permanently finance the transaction through a combination of debt and equity. McCormick expects to finance the transaction with $3.7 billion of new debt, which will include pre-payable terms loans and senior unsecured notes issued in the capital markets, and $500 million in equity through a follow-on offering. In connection with McCormick’s entry into the agreement, McCormick has entered into a commitment letter, dated July 18, 2017, with Merrill Lynch, Pierce, Fenner & Smith Incorporated, Bank of America, N.A., SunTrust Robinson Humphrey, Inc. Wells Fargo Securities, LLC, Credit Suisse Securities (USA) LLC and Credit Suisse AG pursuant to which and subject to the terms and conditions set forth therein, Bank of America and Credit Suisse have agreed to provide a senior unsecured 364-day bridge loan facility of up to $4.2 billion in the aggregate for the purpose of providing the financing necessary to fund all or a portion of the consideration to be paid pursuant to the terms of the agreement and related fees and expenses. Stuart Rogers of Alston & Bird LLP acted as a legal advisor for Credit Suisse Securities (USA) LLC. As of August 7, 2017, McCormick & Company entered into a term loan agreement with Bank of America, N.A as administrative agent, and each lender party pursuant to which the term lenders committed to provide, subject to certain conditions, two tranches of senior unsecured term loans, each in an original aggregate principal amount of $750 million. In addition, as of August 11, 2017, notes offering in the principal amount of $2.5 billion and equity offering from the sale of 6.35 million shares of McCormick at $90.5 per share, also closed. McCormick has agreed to pay Reckitt Benckiser LLC and The R.T. French's Food Group a termination fee of $210 million upon termination of the agreement under specified circumstances relating to the failure to obtain antitrust clearance or a breach by McCormick of its antitrust efforts covenant. For the year ended December 31, 2016, the food business of Reckitt Benckiser had EBITDA of $206 million, annual revenue of $564.2 million, operating income of $ 176.8 million, net income of $134.3 million and had total assets of $609.2 million and total equity of $414.8 million as at December 31, 2016. The transaction is subject to customary closing conditions, including applicable regulatory approvals. The closing of the transaction is subject to customary closing conditions, including the expiration or early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. The transaction is expected to be completed in the third or fourth quarter of McCormick's fiscal 2017. The transaction is expected to be accretive to adjusted EPS. The deal is expected to lead to significant margin accretion. Reckitt Benckiser intends to use the net proceeds form deal to reduce debt. Credit Suisse Securities (USA) LLC acted as financial advisor while David Leinwand of Cleary Gottlieb Steen & Hamilton LLP acted as legal advisor to McCormick & Company. Morgan Stanley & Co., International plc and Robey Warshaw LLP acted as financial advisors to Reckitt Benckiser Group. John D. Amorosi, Daniel Brass, Morgan Lee, Abraham Einhorn and Vishal S. Melwani of Davis Polk & Wardwell LLP acted as legal advisors to Reckitt Benckiser LLC and The R.T. French's Food Group Limited. Edmond T. FitzGerald and Tricia E. Walsh provided compensation advice, Michael Mollerus and Dao Fu provided tax advice and Frank J. Azzopardi provided intellectual property and technology advice to Reckitt Benckiser Group in the transaction. Lisa Jacobs, Kyungwon Lee, Kristen Garry and Joshua Thompson of Shearman & Sterling LLP acted as legal advisors for Merrill Lynch, Pierce, Fenner & Smith Incorporated, Credit Suisse Securities (USA) LLC, SunTrust Robinson Humphrey, Inc. Wells Fargo Securities, LLC, and Bank of America, N.A. as underwriters and arrangers in connection with the acquisition financing.