HUL approves demerger of ice cream business into an independent listed entity

Hindustan Unilever Limited (HUL) has announced its in-principle approval to demerge its Ice Cream business into a standalone listed entity. The decision, taken during a Board of Directors meeting today, is aimed at maximizing shareholder value and aligning business strategies to the high-growth potential of the category.

Under the proposed plan, HUL shareholders will receive shares in the new entity in proportion to their current holdings.

The demerger is subject to necessary regulatory approvals and shareholder consent, with the scheme of demerger expected to be placed before the Board early next year.

The move follows a September 2024 decision by Unilever to separate its global Ice Cream business, which led HUL's Board to establish a committee of Independent Directors to assess the implications and roadmap for the segment.

Based on their recommendations, HUL had announced the intent to separate the business in October 2024.

The Ice Cream division, home to iconic brands like Kwality Wall's, Cornetto, and Magnum, operates in a category noted for its high growth potential and mid-to-high digit profitability. By creating a focused entity, HUL aims to equip the business with dedicated management and tailored strategies, enabling it to respond effectively to market dynamics and achieve its full potential.

The newly-listed entity will retain access to Unilever's global portfolio, brand expertise, and innovation resources, positioning it as a leader in India's Ice Cream market.

HUL anticipates that the demerger will unlock fair value for its shareholders while allowing them the flexibility to participate directly in the Ice Cream business's growth journey.

Preparatory steps, including drafting the scheme of arrangement, have been authorised by the Board, with disclosures to be made in line with SEBI Listing Regulations and applicable laws as the process advances.