HUL to Demerge Ice-Cream Business, Unlocking Growth Potential

Hindustan Unilever’s (HUL) board of directors has given in-principle approval to separate its ice cream business into an independent, publicly traded company.

Once the necessary approvals and procedures are completed, HUL shareholders will receive shares in the new company based on their current shareholding in HUL. The board also approved the creation of a wholly owned subsidiary for this purpose.

Unlocking Value for Shareholders

The decision to demerge aims to unlock the full value of the ice cream business, allowing HUL shareholders to benefit from the growth potential of the ice cream segment. The demerger is expected to provide a smoother transition for the business and its employees.

Approval and Next Steps

The demerger plan still requires approval from both the HUL board and its shareholders. The proposal will be presented to the board early next year, and the management has been authorised to begin preparations for the separation, including creating a detailed scheme.

Growth Potential of Ice-Cream Business

The ice-cream business, which includes popular brands like ‘Kwality Wall’s,’ ‘Cornetto,’ and ‘Magnum,’ has shown strong growth potential and contributes about 3% to HUL’s turnover. The demerger will create a focused, independent ice-cream company, with a dedicated management team to drive its success.

About Hindustan Unilever

Hindustan Unilever operates in the FMCG sector, focusing on Home Care, Beauty and personal Care, and Food and refreshments. The company has factories across India and primarily sells within the country.

Hindustan Unilever share price is currently trading at ₹2,475.95, up by ₹4.50 or 0.18% as of 9:53 AM on November 26. The stock opened at ₹2,486.25 and reached a high of ₹2,494.95 during the session.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.