Hindustan Unilever Limited (HUL), one of India’s largest FMCG companies, has announced a strategic move to demerge its ice cream business into Kwality Wall’s (India) Limited (KWIL), a wholly-owned subsidiary. HUL’s Board approved the decision of Directors in a meeting held on January 22, 2025. This initiative aims to unlock growth potential and deliver better value for shareholders.
Key Highlights of the Demerger
- One-for-One Equity Share Allocation:
Each shareholder of HUL will receive one equity share of KWIL for every equity share held in HUL. - Direct Shareholding in KWIL:
Upon demerger and listing, HUL shareholders will directly own KWIL shares. - Listing of KWIL:
KWIL will become India’s first listed ice cream company, providing it with greater operational flexibility and market focus.
Why the Demerger?
HUL’s ice cream portfolio, featuring iconic brands such as Kwality Wall’s, Cornetto, and Magnum, operates in a high-growth segment. The demerger will allow KWIL to:
- Focus solely on the ice cream category.
- Implement strategies tailored to its business model and market dynamics.
- Retain access to global expertise and innovation from HUL’s parent company, Unilever.
Rohit Jawa, CEO and Managing Director of HUL, emphasized, “This move will unlock fair value for HUL shareholders and allow them to participate in the growth journey of our ice cream business.”
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Benefits for Shareholders and Consumers
- Shareholder Value:
Shareholders gain flexibility to invest directly in the high-growth ice cream business. - Enhanced Market Position:
KWIL will have the operational freedom to cater to market trends and maintain its competitive edge. - Innovation and Expertise:
The ice cream brands under KWIL will continue benefiting from Unilever’s global expertise in innovation and branding.
Regulatory Approvals in Progress
The scheme of arrangement is being executed as per the provisions of the Companies Act, 2013, and other applicable laws. The demerger will take effect after receiving statutory and regulatory approvals.
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Conclusion
The demerger marks a new chapter for HUL’s ice cream business, allowing Kwality Wall’s to emerge as an independent entity with a sharper focus on growth and innovation. With iconic brands, robust management, and strategic backing, KWIL is poised to dominate the Indian ice cream market and deliver value to its shareholders.
