Hindustan Unilever Limited (HUL) has announced its decision to separate its ice cream business, which currently contributes approximately 3% to the company’s turnover. This move follows recommendations from a committee of independent directors after a thorough review of the business.

The company revealed the decision during its results announcement for the second quarter on October 23, 2024.

“Based on the further recommendations of the Independent Committee, the Board will determine the mode of separation by the end of this year with an objective of maximising value for all shareholders,” the company said in its exchange filing.

The independent committee highlighted that the ice cream segment represents a high-growth category requiring significant investment to realise its full potential. Additionally, with Unilever retaining ownership of the trademarks and know-how, local capabilities will need to be developed for continued operation.

The separation is driven by the distinct operating model of the ice cream business, which involves specialised cold chain infrastructure and a unique channel landscape, limiting synergies with HUL’s core operations.

This restructuring aims to sharpen HUL’s focus on its primary sectors, including Beauty, Foods, and Health and Wellbeing, while allowing the ice cream division to operate with increased flexibility.

The Board of Directors plans to determine the method of separation by the end of this year, aiming to maximize shareholder value. HUL will provide necessary disclosures in accordance with SEBI Listing Regulations and other applicable laws following the Board’s considerations.