Hindustan Unilever (HUL) said on October 23 that its Board decided to separate the FMCG major's ice cream business by December, based on the recommendation of the Independent Committee.
Rohit Jawa, CEO and Managing Director of HUL, said in a press conference after the Q2FY25 result announcement: "Board will decide the mode of separation of ice cream business by December."
In a post-earnings press briefing, Jawa explained that there are two main options for separating a business: selling it or demerging and listing it as a separate entity. "These are both the options that the board is evaluating and the board has appointed an independent committee to review the way forward. The committee will work upon and then guided by committees' reviews, the board will decide to mode of separation between these two lead options," he said.
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"Based on the further recommendations of the Independent Committee, the Board will determine the mode of separation by the end of this year with an objective of maximising value for all shareholders,” the company also said in the regulatory filing.
HUL’s ice cream business, though a smaller part of its portfolio, has shown notable growth. In the Q2 FY25, ice-cream business maintained its volume vis-à-vis last year.
Globally, HUL’s parent company Unilever Plc announced on March 19, 2024 that it would separate its ice cream business to better align with its growth strategies. This decision has sparked HUL to closely examine its ice cream operations and consider several strategic options.
While the ice cream segment currently accounts for just 3 percent of HUL’s total turnover, its recent performance and the broader strategic context make this evaluation crucial. Its parent company announced its decision to demerge its 7.9 billion Euro ice cream unit by end of 2025.
On September 9, HUL decided to review its ice cream business strategy and explore “potential structures” and “alternatives” for the same. This mirrors what globally the company is restructuring.
Based on the recommendation of the Independent Committee set up then, the matter will be placed for final consideration of the Audit Committee and the Board at their respective meetings to be scheduled in “due course”.
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