HUL board approves plan to demerge ice cream business into separate listed entity
“Subject to the necessary approvals and procedures to be followed in accordance with the applicable laws, it is proposed that the shareholders of HUL will receive shares in the new entity in proportion to their shareholding in HUL,” the company said in a stock exchange filing.
The demerger decision follows Unilever’s move to separate its global ice cream business and subsequent evaluations by an independent committee of HUL directors, which culminated in the announcement of the separation in October 2024.
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The proposal is subject to board and shareholder approvals, with the detailed scheme of demerger expected to be presented early next year. The decision aims to maximise value for HUL shareholders while enabling the ice cream business to operate as an independent entity.
In September, the board constituted a committee of independent directors of the company to evaluate the prospects and way forward for the ice cream business following Unilever’s decision to separate the ice cream business. Based on the recommendation of the independent committee, the board announced the separation of the business in October 2024.
“The demerger of ice cream business will create a leading listed ice cream company in India, which will have a focused management with greater flexibility to deploy strategies suited to its distinctive business model and market dynamics thus realising its full potential,” the company stated.
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A separate listed entity will unlock fair value for HUL shareholders and give them the flexibility to stay invested in the ice cream business’ growth journey. The demerger will also facilitate a smoother transition for business as well as our people, HUL said, adding, “The board has authorised HUL’s management to undertake preparatory steps required for the potential demerger of the Ice Cream business including the drawing up of the scheme of arrangement.”
Shares of Hindustan Unilever Ltd ended at ₹2,483.15, up by ₹37.75, or 1.54%, on the BSE.
(Edited by : Shoma Bhattacharjee)
