HUL Ice Cream Business Demerger Gets Board Approval - What Does It Mean?

HUL Ice-Cream Demerger: On November 25, Hindustan Unilever announced the board's approval for its proposed demerger of the ice cream business owning brands such as Kwality Wall's, Cornetto and Magnum, into an independent listed entity, the company shared in a BSE filing.

What Happens To The Existing Shareholders?

The existing shareholders of the firm will receive shares in the new entity in proportion to their shareholding in HUL, as per a company statement.

On October 23, HUL announced going for a valuation of the ice cream business as it was trying to maximise value for all its shareholders.

What Did The Board Say?

“The Board, at its meeting held today on 25th November 2024, has accorded its in-principle approval for the demerger of the Ice Cream business into an independent listed entity, based on the recommendation of the Independent Committee,” the exchange filing noted.

The company also said that the ‘in-principle approval’ is subject to further evaluation to be carried out by the Board in due course and the procedures to be followed by the company according to the applicable laws.

"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 management of HUL has also been authorised to undertake preparatory steps required for the demerger of the Ice Cream business.

The Independent Committee has also announced that the operating model of the Ice Cream business is different including cold chain infrastructure and a distinct landscape limiting synergies with the rest of the company's business.

Earlier, the parent company of HUL, Unilever PLC has expressed its intention to separate its global ice cream business across jurisdictions.

For FY24, HUL's revenue from the sales of products was Rs 59,579 crore.