19. SUBSEQUENT EVENTS

Acquisition - On December 15, 2016, we purchased 100% of the shares of Enrico Giotti SpA (Giotti), a leading European flavor manufacturer located in Italy for a cash payment of $125.5 million, subject to certain post-closing adjustments. The acquisition was funded with cash and short-term borrowings. Giotti is well known in the industry for its innovative beverage, sweet, savory and dairy flavor applications. At the time of the acquisition, annual sales of Giotti were approximately €53 million. Our acquisition of Giotti in fiscal 2017 expands the breadth of value-added products for McCormick's industrial segment, including additional expertise in flavoring health and nutrition products.

Employee benefit and retirement plans - Subsequent to our fiscal year ended November 30, 2016, we made several significant changes to the following employee benefit and retirement plans:

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On December 1, 2016, the Management Committee approved the freezing of benefits under the McCormick U.K. Pension and Life Assurance Scheme (the U.K. plan). The effective date of this freeze is December 31, 2016. Although the U.K. plan will be frozen, employees who are participants in that plan will retain benefits accumulated up to the date of the freeze, based on credited service and eligible earnings, in accordance with the terms of the plan.

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On January 3, 2017, the Management Committee approved the freezing of benefits under the McCormick Pension Plan, the defined benefit pension plan available to U.S. employees hired on or prior to December 31, 2011. The effective date of this freeze is November 30, 2018. Although the U.S. Pension plan will be frozen, employees who are participants in that plan will retain benefits accumulated up to the date of the freeze, based on credited service and eligible earnings, in accordance with the terms of the plan.

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On January 3, 2017, the Compensation Committee of our Board of Directors approved the freezing of benefits under the McCormick Supplemental Executive Retirement Plan (the “SERP”). The effective date of this freeze is January 31, 2017. Although the SERP will be frozen, executives who are participants in the SERP as of the date of the freeze, including certain named executive officers, will retain benefits accumulated up to that date, based on credited service and eligible earnings, in accordance with the SERP’s terms.

These changes are in alignment with ongoing initiatives to create a market competitive, cost competitive and consistent health, welfare and retirement benefit structure across our organization. As a result of these pension benefit plan changes, we expect to recognize lower retirement benefit expense in 2017 and future periods. That lower retirement benefit expense in 2017 will be partially offset by certain amounts provided by the company to mitigate the impact of the 2017 freeze on certain employees, including: (i) expenses relating to special one-time grants of restricted stock units to be provided to certain executives in 2017 who are participants in the SERP at the time of freeze; and (ii) cash payments, equivalent in value to the Company’s contribution prior to the freeze, provided to effected employees of the U.K. plan as of December 1, 2016 (which will continue for a period of two years).