Hindustan Unilever has announced that its board has given in-principle approval for the demerger of its ice cream business into a separate entity that will be independently listed. This move is contingent upon approval from both the Board and shareholders, with the final demerger scheme set to be presented to the Board early next year. Shareholders will receive shares in the newly-formed entity based on their existing holdings in HUL.
The decision to separate the ice cream business was made following a thorough evaluation by a committee of Independent Directors, which recommended this direction to unlock the market's potential. The ice cream category contributes around 3 percent to HUL’s total revenue and requires significant investments to fully exploit its growth opportunities.
HUL emphasized that the ice cream business operates with specialized infrastructure and a different channel landscape, limiting synergies with the rest of HUL’s operations. By divesting this segment, the company aims to prioritize its core business areas and expand in sectors like beauty, foods, and health. This restructuring aims to provide greater flexibility and focus on the ice cream segment, ultimately optimizing value for shareholders.
Despite experiencing a decrease in consolidated net profit during the September quarter of FY25, HUL still saw a 3 percent growth in underlying volume. The decrease in profit was attributed to a one-time indirect tax credit received in the previous year, which had positively impacted revenue and profit in the beauty and wellbeing segment.