Hindustan Unilever’s Board of Directors has granted in-principle approval to demerge its Ice Cream business into an independent listed entity. The move, aimed at maximising shareholder value, is subject to necessary approvals and legal procedures.
Shareholders of HUL will receive shares in the new entity in proportion to their current holdings. The final decision on the demerger will be based on the approval of the Board and shareholders, with the scheme of demerger expected to be presented to the Board early next year.
In September, the Board had constituted a committee of Independent Directors of the Company to evaluate the prospects and way forward for the Ice Cream business pursuant to Unilever’s decision to separate their Ice Cream business. Based on the recommendation of the Independent Committee, the Board had announced the separation of the business in October 2024.
The Ice Cream business, including brands like Kwality Wall’s, Cornetto, and Magnum, is a high-growth segment with mid to high single-digit profitability. The demerger will create a separate listed ice cream company in India with a focused management team and greater flexibility to implement strategies suited to its business model. The new entity will benefit from expertise in portfolio, branding, and innovation from the global Ice Cream business. This move will unlock value for HUL shareholders and provide them the option to stay invested in the Ice Cream business’s growth. The demerger will also ensure a smoother transition for the business and its employees.
The Board has authorised HUL’s management to undertake preparatory steps required for the potential demerger of the Ice Cream business including the drawing up of the scheme of arrangement. HUL shall make necessary disclosures in accordance with the SEBI Listing Regulations and other applicable laws, post consideration and approval of the matter by the Board.
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