New Delhi: Fast-Moving Consumer Goods (FMCG) giant Hindustan Unilever Limited (HUL) announced on Friday the incorporation of a new subsidiary, Kwality Wall’s (India) Ltd (KWIL), as part of its plan to demerge its ice cream business. The move is aimed at creating an independent entity for the ice cream segment, which includes popular brands such as Kwality Wall’s, Cornetto, and Magnum.
In a regulatory filing, HUL stated that KWIL has been established exclusively for the proposed demerger of its ice cream business. The decision is currently under evaluation by the company’s board. Once the demerger is complete, HUL will retain 100% ownership of KWIL’s issued and subscribed share capital.
The demerger plan was initially approved by HUL’s board on November 25, 2024. Under the proposal, existing shareholders of HUL will receive shares in the new entity proportionate to their current shareholding in the company.
The decision to separate the ice cream business was based on recommendations from an Independent Committee formed by HUL in September 2024. The committee highlighted that the ice cream segment operates on a distinct business model, requiring specialized cold chain infrastructure and a unique distribution network. These factors limit synergies with HUL’s other business operations, making the demerger a strategic move.
This development aligns with the global strategy of HUL’s parent company, Unilever PLC, which earlier this year expressed its intention to separate its ice cream business across all markets.
For the financial year ending March 2024, HUL reported total revenue from product sales at Rs 59,579 crore. The demerger of the ice cream business is expected to streamline operations and allow both entities to focus on their respective growth trajectories.
The proposed demerger marks a significant step in HUL’s efforts to optimize its portfolio and enhance shareholder value. Further details regarding the timeline and structure of the demerger are expected to be announced following board approval.
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