FMCG major Hindustan Unilever (HUL) has set up a new subsidiary Kwality Wall’s in reference to the proposed demerger of the company’s ice cream business.
“Kwality Wall’s (India) Ltd (KWIL) has been incorporated for the proposed demerger of the company’s ice cream business, which is currently being assessed by the company’s board,” the FMCG executive said in a regulatory filing in January. 10.
HUL will own one hundred pc. issued and subscribed share capital of KWIL. As per the disclosure, the newly incorporated entity has a certified capital of Rs 250 crore.
Earlier on November 25, 2024, HUL had approved the demerger of the ice cream business, which owns brands equivalent to Kwality Wall’s, Cornetto and Magnum, into an independent listed company.
The existing shareholders of the FMCG company will receive shares in the new entity in proportion to their shares in HUL, the company said.
The HUL Management Board decided to spin off the ice cream business based on the advice of the Independent Committee, which was appointed by the FMCG chief in early September 2024.
The company highlighted that the ice cream category is a fast-growing market, contributing around 3 percent to HUL’s total revenue. Significant investment is required to completely unlock the potential of this market.
It said the ice cream business operates under a unique model that involves specialized cold chain infrastructure and a distinct channel landscape, limiting potential synergies with HUL’s other businesses.
The company’s restructuring goals to prioritize HUL’s core businesses and expand its footprint in emerging sectors equivalent to beauty, food, health and wellness. By divesting the ice cream business, HUL will provide greater flexibility and deal with this segment, ultimately optimizing shareholder value.
Earlier this yr, HUL’s parent Unilever PLC expressed its intention to unbundle its global ice cream business across jurisdictions. For the financial yr ended March 2024, HUL’s revenue from product sales was Rs 59,579 crore.
