In principle, Hindustan Unilever Limited (HUL) has approved the demerger of its ice cream division into a separate publicly traded company. At today's Board of Directors meeting, the decision was made with the intention of optimising shareholder value and coordinating business plans with the category's significant development potential.
Shares in the new company will be distributed to HUL shareholders in accordance with their existing ownership under the proposed plan.
The demerger plan is anticipated to be presented to the Board early next year, subject to the required regulatory approvals and shareholder support.
The action comes after Unilever decided in September 2024 to split its worldwide ice cream business, prompting the board of HUL to form an independent directors committee to examine the ramifications and develop a plan for the segment.
In October 2024, HUL declared its intention to split the company based on their suggestions.
With well-known brands including Magnum, Cornetto, and Kwality Wall's, the Ice Cream company works in a market with strong growth potential and mid-to-high digit profitability. By establishing a targeted organisation, HUL hopes to provide the company with committed leadership and customised plans, allowing it to adapt to changing market conditions and realise its greatest potential.
As a leader in the Indian ice cream market, the recently listed company will continue to have access to Unilever's worldwide portfolio, brand knowledge, and innovation capabilities.
HUL believes that the demerger will enable its shareholders to get fair value while allowing them to actively engage in the expansion of the Ice Cream company.
The Board has approved preparatory actions, such as creating the scheme of arrangement, and as the process progresses, disclosures must be made in accordance with the SEBI Listing Regulations and relevant regulations.
