HUL board approves plan to spin off ice cream business into separate listed entity

New Delhi: Hindustan Unilever's Board of Directors has given in-principle approval to spin off its ice cream business into a separate listed entity. 

In a statement, HUL said that the shareholders of HUL will receive shares in the new company proportional to their existing holdings, pending necessary legal approvals and procedures. 

HUL is the parent company of ice cream brands such as “Kwality Wall's," "Cornetto,” and "Magnum.”

“The final decision on the demerger will require the board and shareholders' approval, with the scheme of demerger set to be reviewed early next year. After evaluating various separation options, the Board concluded that demerging the business would best maximise value for shareholders,” it added. 

In September, the HUL 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 its ice cream business. Based on the recommendation of the Independent Committee, the Board announced the separation of the business in October 2024.

HUL wrote, “The demerger of the Ice ice cream business will create a leading listed ice cream company in India, which will have focused management with greater flexibility to deploy strategies suited to its distinctive business model and market dynamics, thus realising its full potential. Further, the business will continue to be equipped with the portfolio, brand and innovation expertise of the largest global ice cream business, enabling it to keep winning in the marketplace.” 

The FMCG major further shared that a separate listed entity will unlock fair value for HUL shareholders and give them the flexibility to stay invested in Ice Cream’s growth journey. Demerger will also facilitate a smoother transition for business as well as our people.

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.