HUL likely to spin-off ice-cream business into separate unit following Unilever

Hindustan Unilever (HUL) is pondering turning its ice-cream business into a separate unit for the possibility of a potential sale in the future, reported ET.

The news comes following Unilever’s announcement of spinning off its ice-cream unit, which includes popular brands like Magnum and Ben & Jerry’s.

For HUL in India, the ice-cream business accounts for Rs. 2000 crore or around 3 percent of total sales. It includes popular brands like Magnum and Kwality Wall’s.

In the ice-business, HUL is second in line behind Amul. It also competes with local brands like Vadilal, Naturals, Mother Dairy, Havmor, and Baskin Robbins along others.

ET also reported that HUL’s ice-cream business is unlikely to be bought by any Indian player due to the significant difference in the ice-cream category’s business model. It might be sold to a multinational or to private equity firms. The strategy behind this will be determined by what Unilever chooses to do with its ice-cream business.

Earlier, Unilever CEO Hein Schumacher said on a call with journalists that the ice cream business is currently in the process of moving to a new head office in Amsterdam. However, he said that he is still open to options on where to list the new company.

Unilever’s ice-cream business accounts for around 16 percent of the company’s global sales and in some countries it accounts for a third or about 40 percent, reported Reuters.