McCormick Announces Sale of Packaging Business

SPARKS, Md., Jun 26, 2003 /PRNewswire-FirstCall via COMTEX/ -- McCormick & Company, Incorporated (NYSE: MKC) today announced that it has reached an agreement to sell substantially all the operating assets of its packaging business to Kerr Group, Inc. The sale includes the assets of both Setco, Inc. and Tubed Products, Inc. The Company acquired Tubed Products, Inc. in 1968 and Setco, Inc. in 1981. These businesses manufacture certain products used for the packaging of McCormick's spices and seasonings as well as packaging materials for other industries such as vitamin, drug, and personal care.

Under the terms of the sale agreement, the packaging business will be sold for $142.5 million and include the assumption of all normal trade liabilities. Of the $142.5 million, $132.5 million will be paid in cash upon completion of the sale, and the remaining $10 million will be paid over five years based on meeting certain performance objectives. The transaction is subject to Hart Scott Rodino clearance and other customary closing conditions. McCormick expects the transaction to close during the third quarter of 2003. McCormick and Kerr have also entered into a multi-year supply agreement.

Robert J. Lawless, Chairman, President & CEO of McCormick, stated, "McCormick indicated last year that the packaging business was not a strategic part of our food business and was under review. While several options were reviewed, we believe the transaction announced today will build long-term value for McCormick shareholders, create opportunities for the employees of Setco and Tubed Products, and best serve the customers."

The proceeds from this sale will be used to reduce a portion of the debt related to the acquisition of Zatarain's completed on June 4, 2003. The Company will also resume its share repurchase program. In 2002, McCormick reported sales of $2,320 million and earnings per share of $1.26. The disposition of the packaging business will be reported as a discontinued operation. As such, the Company will report a decrease in 2002 sales from continuing operations of $171 million and a decrease in earnings per share from continuing operations of $0.07. In 2003, earnings per share from discontinued operations from the packaging business will include approximately $0.09 for the gain on the sale of this business.

Mr. Lawless further commented, "We have made two key strategic moves in the last few weeks. First was our acquisition of Zatarain's, a growing business that expands our U.S. consumer base and offers opportunities internationally and in food service. Second is this agreement to sell the packaging business. Following the completion of this transaction, McCormick will be fully focused on our core business of spices, seasonings and flavors. Our base businesses, both consumer and industrial, are our platform for future growth and the key to delivering shareholder value."

Reclassification of the Packaging Business Results

The sale of the operating assets of the packaging business will be reported as a discontinued operation beginning in the third quarter of 2003. For detailed information on the reclassifications necessary to reflect this as a discontinued operation in previously issued financial statements, please visit www.mccormick.com, under Company Information, Investor Information, "Reclassification of Packaging Business."

Forward-looking Statement

Certain information contained in this release, including expected synergies and projections, are "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are based on management's current views and assumptions and involve risks and uncertainties that could be materially affected by external factors such as: actions of competitors, customer relationships, fluctuations in the cost and availability of supply chain resources and foreign economic conditions, including currency rate fluctuations. The Company undertakes no obligation to update or revise publicly, any forward-looking statements, whether as a result of new information, future events or otherwise.

About Kerr Group, Inc.

Kerr Group, Inc. is a leading provider of specialty plastic closures and containers to the pharmaceutical, healthcare and food and beverage industries in North America. Kerr designs and manufactures highly engineered, proprietary, injection and compression molded plastic closures and containers that incorporate functional features such as child-resistance and tamper- evidence. Kerr is a recognized market leader in technological innovation and proactively works with its customers to design and manufacture closures and containers to serve its customers' specific product needs. In the pharmaceutical market, Kerr partners with its customers in designing packaging which meets or exceeds the requirements of the Food and Drug Administration and the Consumer Product Safety Commission. Kerr is majority-owned by Fremont Partners, a San Francisco-based private equity firm (www.fremontpartners.com). For more information about Kerr Group, visit the Company's website at www.kerrgroup.com.

About McCormick & Company, Incorporated

McCormick & Company, Incorporated is the global leader in the manufacture, marketing and distribution of spices, seasonings and flavors to the entire food industry - to foodservice and food processing businesses as well as to retail outlets. In addition, the packaging group manufactures and markets specialty plastic bottles and tubes for personal care and other industries. McCormick reported 2002 net sales of $2.3 billion. For more information about McCormick, visit the Company's website on the Internet at: http://www.mccormick.com.

SOURCE McCormick & Company, Incorporated

McCormick & Company Corporate Communications, +1-410-771-7310

http://www.kerrgroup.com