Hindustan Unilever Limited (HUL), a leading player in India’s fast-moving consumer goods sector, has initiated the demerger of its ice cream division by incorporating a wholly-owned subsidiary named Kwality Wall’s (India) Ltd (KWIL). This strategic move is part of HUL’s plan to establish its ice cream business, which includes popular brands like Kwality Wall’s, Cornetto, and Magnum, as an independent listed entity.
The decision to demerge follows a comprehensive review by an Independent Committee formed in September 2024. The committee highlighted that the ice cream segment, contributing approximately 3% to HUL’s turnover, operates with a distinct business model, including specialized cold chain infrastructure and unique distribution channels, which limits synergies with HUL’s other operations.
In November 2024, HUL’s Board granted in-principle approval for the demerger, aiming to unlock value for shareholders and provide the ice cream business with the autonomy to focus on growth strategies tailored to its market dynamics. Shareholders of HUL are expected to receive shares in the new entity proportional to their existing holdings, subject to necessary approvals and legal procedures.
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This strategic restructuring aligns with Unilever PLC’s global initiative to separate its ice cream business across various jurisdictions, announced earlier in 2024. By creating a dedicated entity for its ice cream operations, HUL aims to concentrate on its core segments, including beauty, foods, health, and well-being, while enabling the new subsidiary to operate with greater flexibility and focus.
The incorporation of KWIL marks a significant milestone in this demerger process. As the transition progresses, stakeholders anticipate that the move will enhance operational efficiency and unlock value, positioning both HUL and its ice cream business for sustained growth in their respective markets.
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