Hindustan Unilever board decides to separate ice cream business
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In a significant move, the Board of Directors of Hindustan Unilever Limited (HUL) announced the decision to separate its ice cream business on Wednesday. This decision follows a thorough evaluation by a committee of Independent Directors, which was tasked with determining the best path forward for this segment.
The Independent Committee outlined several key considerations that influenced the Board’s decision.
The ice cream category, which contributes approximately 3% to HUL’s overall turnover, is identified as a high-growth market that requires substantial investments to unlock its full potential, the company said in a exchange filing.
Given Unilever owns the trademarks and know-how and has announced the separation of its ice cream business, local capabilities will need to be developed to continue running the Business, it added.
The ice cream business operates under a unique model that includes specialised cold chain infrastructure and a distinct channel landscape, which limits potential synergies with the rest of HUL’s operations.
According to the company, this restructuring is aimed at allowing HUL to concentrate more on its core business areas while enhancing its presence in trending sectors such as Beauty, Foods, Health, and Wellbeing. By separating the ice cream business, HUL will enable this segment to operate with increased flexibility and focus, ultimately maximizing value for shareholders.
The Board is expected to finalize the mode of separation by the end of this year, guided by the recommendations of the Independent Committee.
The Independent Committee outlined several key considerations that influenced the Board’s decision.
The ice cream category, which contributes approximately 3% to HUL’s overall turnover, is identified as a high-growth market that requires substantial investments to unlock its full potential, the company said in a exchange filing.
Given Unilever owns the trademarks and know-how and has announced the separation of its ice cream business, local capabilities will need to be developed to continue running the Business, it added.
The ice cream business operates under a unique model that includes specialised cold chain infrastructure and a distinct channel landscape, which limits potential synergies with the rest of HUL’s operations.
According to the company, this restructuring is aimed at allowing HUL to concentrate more on its core business areas while enhancing its presence in trending sectors such as Beauty, Foods, Health, and Wellbeing. By separating the ice cream business, HUL will enable this segment to operate with increased flexibility and focus, ultimately maximizing value for shareholders.
The Board is expected to finalize the mode of separation by the end of this year, guided by the recommendations of the Independent Committee.