Hindustan Unilever (HUL) has demerged its ice cream business through a scheme of arrangement approved by the Board on January 22. The FMCG major announced the demerger while reporting its quarterly results for the third quarter of FY25. The company will list Kwality Walls (India) separately, which it incorporated on January 10, 2025.
HUL demerger ratio
While the investors who hold shares of HUL will receive shares of the new entity in a 1:1 ratio. This means existing shareholders will get additional shares of the demerged entity.
HUL: What’s there for existing shareholders
According to HUL, it’s a great business with significant growth potential. It has focused management with greater flexibility to deploy strategies suited to Ice Cream’s distinctive business model, read the investor presentation. Further, it said that Kwality Walls (India) is equipped with the portfolio, brand, and innovation expertise from the world’s largest ice cream company, Unilever. For the reporting quarter, HUL’s ice cream revenue remained flat on year.
Also ReadHUL Q3 Results: Profit rises by 19.18% to Rs 2,989 crore HUL: When was demerger announced
In Q2 FY25, HUL announced that its Board gave an in-principle approval to demerge the ice cream business into a separate listed entity. “The Board considered different modes of separation of the ice-cream business and after due consideration, with a view to maximising value for all the shareholders, the board has accorded in-principle approval to demerge the business,” said the company.
HUL stake buy in Minimalist
Apart from that, HUL has acquired a 90% stake in Minimalist for an enterprise value of Rs 2,955 crore. It is a beauty brand founded in 2020 by Mohit Yadav and Rahul Yadav. The company said it will acquire the remaining 9.5% in another two years. Minimalist has an annual revenue run rate of over Rs 500 crore and the business has been profitable since inception. Rohit Jawa, Chief Executive Officer and Managing Director at HUL said, “We are delighted to welcome Minimalist into the HUL family. This acquisition is another key step to grow our Beauty & Wellbeing portfolio in high-growth premium demand spaces.”
However, the company cautioned about the consumption demand to remain moderate in the near term. “If commodity prices remain where they are, low-single-digit price growth is expected,” said HUL.
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