HUL Announces Demerger of Ice Cream Business into Separate Entity

25 Nov 2024 , 11:58 PM

Hindustan Unilever Ltd (HUL) announced its board’s in-principle approval to demerge its ice cream business into a separate listed entity on November 25, 2024.

The demerger will involve shareholders receiving shares in the new entity proportional to their HUL shareholding, subject to legal and regulatory approvals. The decision follows Unilever’s global strategy to separate its ice cream business and subsequent evaluation by an independent committee of HUL directors.

HUL’s board formed an independent committee in September 2024 to assess the business prospects and make recommendations, which culminated in the decision announced in October 2024. The proposal requires board and shareholder approval, with the detailed scheme expected to be presented in early 2025.

HUL aims to maximize shareholder value by enabling the ice cream business to operate independently, allowing it to focus on its distinctive market dynamics and strategic growth potential.

The separate listed entity will function as India’s leading ice cream company, with a specialized management team for better strategy execution.

This move will unlock fair value for HUL shareholders, offering them flexibility to invest in the ice cream business’ growth journey. HUL’s management has been tasked with preparing a scheme of arrangement and ensuring a smooth transition for employees and operations. The demerger aligns with HUL’s goal of fostering growth and optimizing market-specific strategies for the ice cream sector.