Hindustan Unilever Ltd (HUL) has announced that its board has approved the demerger of its ice cream business into an independent listed entity.
HUL owns Kwality Wall’s, Cornetto, and Magnum
The ice cream business owns popular brands such as Kwality Wall’s, Cornetto, and Magnum. As per the plan, existing shareholders of HUL will receive shares in the new entity in proportion to their shareholding in HUL.The demerger process will be subject to necessary approvals and procedures in accordance with applicable laws.
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Earlier, HUL had stated that it was exploring options to separate its ice cream business, which contributes around 3% to the company’s topline. The company had formed an Independent Committee to evaluate the best mode of separation.
Board has accorded in-principle approval to demerge – HUL
“The Board considered different modes of separation of the Ice Cream business and after due consideration, with a view to maximising value for all the shareholders, the Board has accorded in-principle approval to demerge the business,” said HUL. The company has also authorized its management to undertake preparatory steps required for the demerger of the Ice Cream business.
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With intention to separate its global ice cream business, the decision to demerge the ice cream business is in line with HUL’s parent entity, Unilever PLC’s. The Independent Committee had noted that the Ice Cream business has a different operating model, including cold chain infrastructure, and a distinct channel landscape, which limits synergies with the rest of the company’s business.
For the financial year ended March 2024, HUL’s revenue from the sale of products was INR 59,579 crore.
