HUL to Spin Off Ice Cream Business

Hindustan Unilever Limited (HUL), a leading FMCG company in India, has announced its intention to demerge its ice cream business into a separate, publicly-traded company. This strategic move is aimed at unlocking the value of the ice cream business and providing it with greater flexibility to pursue growth opportunities.

The decision to demerge the ice cream business comes after Unilever's global decision to separate its ice cream business. HUL's board of directors has given its in-principle approval for the demerger, subject to necessary approvals and legal procedures.

Shareholders of HUL will receive shares in the new ice cream company in proportion to their current holdings. The final decision on the demerger will be based on the approval of the board and shareholders, with the scheme of demerger expected to be presented to the board early next year.

The ice cream business, which includes popular brands like Kwality Walls, Cornetto, and Magnum, is a high-growth segment with mid to high single-digit profitability. By demerging the business, HUL aims to create a separate entity with a focused management team and greater flexibility to implement strategies tailored to its business model.

The new ice cream company will benefit from the expertise and resources of Unilever's global ice cream business. This includes expertise in portfolio management, branding, and innovation. The demerger is expected to unlock value for HUL shareholders and provide them with the option to stay invested in the growth of the ice cream business.

The demerger will also ensure a smoother transition for the business and its employees. HUL's board has authorized the management to undertake the necessary preparatory steps for the demerger, including the drafting of the scheme of arrangement. HUL will make the required disclosures to the Securities and Exchange Board of India (SEBI) and other regulatory authorities.