Hindustan Unilever Limited (HUL) on June 25, 2025, announced a significant development in the planned demerger of its ice cream business. The company informed the stock exchanges that its parent, the Unilever Group, has entered into a Share Purchase Agreement (SPA) to sell its entire stake in the soon-to-be-demerged entity, Kwality Wall's (India) Limited (KWIL), to The Magnum Ice Cream Company HoldCo 1 Netherlands B.V. ("Magnum HoldCo"). The transaction will see Magnum HoldCo acquire the 61.9% stake in KWIL that the Unilever Group is set to hold following the completion of the demerger of HUL's ice cream business. This move is a crucial step in Unilever's global strategy to separate its ice cream business into a standalone, listed entity.
Key Details of the Share Purchase Agreement (SPA)| Particulars | Details |
|---|
| Acquirer | The Magnum Ice Cream Company HoldCo 1 Netherlands B.V. ("Magnum HoldCo") |
| Target Company | Kwality Wall's (India) Limited ("KWIL") |
| Sellers | Unilever Group Shareholders (including Unilever PLC, Unilever Group Limited, and other holding companies) |
| Stake to be Acquired | 61.9% of the issued and paid-up share capital of KWIL (to be held by Unilever Group post-demerger) |
| Agreement Date | June 25, 2025 |
| Purpose of Agreement | Acquisition of the entire equity shareholding in KWIL that will be held by the Unilever Group Shareholders following the demerger of HUL's ice cream business. |
| Impact on Control | Upon completion, KWIL will be controlled by and become a subsidiary of TMICC HoldCo. |
| Key Conditions | - Successful demerger of KWIL from HUL and subsequent listing of KWIL shares. - Receipt of requisite statutory and other approvals. - Magnum HoldCo making an open offer to the public shareholders of KWIL. |
The Two-Step Restructuring Plan
The transaction is part of a multi-layered restructuring process. First, as announced on January 22, 2025, HUL will demerge its ice cream business into a new, independent entity, Kwality Wall's (India) Limited. Upon the effectiveness of this demerger scheme, all shareholders of HUL will be issued one share of KWIL for every one share held in HUL. Consequently, the Unilever Group, which holds a 61.9% stake in HUL, will hold an equivalent 61.9% stake in the newly listed KWIL. The second step, detailed in the June 25 filing, involves the immediate sale of this 61.9% stake. The SPA has been executed between the Unilever Group Shareholders, Magnum HoldCo, and The Magnum Ice Cream Company B.V. for the transfer of this holding. It is important to note that neither HUL nor KWIL are direct parties to this share purchase agreement.
Change in Control and Shareholder Impact
Upon the successful completion of this acquisition, the control of Kwality Wall's (India) Limited will shift from the Unilever Group to The Magnum Ice Cream Company HoldCo. KWIL will cease to be an indirect subsidiary of Unilever PLC and will become a subsidiary of Magnum HoldCo. The completion of the deal is contingent on several key conditions. These include the successful execution of the demerger of the ice cream business from HUL, the listing of KWIL's shares on the stock exchanges, and the receipt of all necessary statutory and regulatory approvals. Furthermore, the deal is subject to Magnum HoldCo making an open offer to the public shareholders of KWIL for acquiring additional shares, in compliance with the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011.
Global Strategy and Intellectual Property
This move aligns with Unilever's global announcement on March 19, 2024, to separate its ice cream division into a standalone business. The new global entity, 'The Magnum Ice Cream Company', is expected to be demerged from Unilever and listed in Amsterdam, London, and New York by the fourth quarter of 2025. To ensure business continuity, the SPA includes provisions for intellectual property. Unilever PLC has agreed to facilitate a license agreement between Magnum IP Holdings B.V. and KWIL. This will grant KWIL continued use of the intellectual property rights currently licensed to HUL for the India ice cream business. The agreement will be on substantially the same commercial terms and will be effective until at least February 1, 2028, subject to regulatory approvals.
