HUL ramps up enthusiasm in ice cream business, integrates new subsidiary Kwality Wall’s

FMCG major Hindustan Unilever (HUL) has formed a new subsidiary, Kwality Wall’s, for the proposed merger of the company’s ice cream business.

“Kwality Wall’s (India) Ltd (KWIL) has been incorporated for the purpose of proposed amalgamation of the company’s ice cream business, which is currently subject to evaluation by the board of directors of the company,” the FMCG major said in a regulatory filing in January. 10.

HUL will own 100 percent of the issued and subscribed share capital of KWIL. The newly formed entity has an authorized capital of Rs 250 crore, according to the disclosure.

Earlier on November 25, 2024, HUL had agreed to demerge the ice cream business, which owns brands like Kwality Wall’s, Cornetto and Magnum, into a separate listed entity.

Existing shareholders of the FMCG major will get shares in the new entity in proportion to their shareholding in HUL, it said.

HUL’s board has decided to demerge the ice cream business, on the recommendation of the independent committee, which was constituted by the FMCG major earlier in September 2024.

The company highlighted the ice cream category as a high-growth market that contributes around 3 percent to HUL’s total revenue. To fully unleash the potential of this market, significant investments are needed.

The ice cream business operates on a unique model that includes specialized cold chain infrastructure and a differentiated channel, limiting potential synergies with the rest of HUL’s operations, it said.

The corporate restructuring aims to prioritize HUL’s core business areas and expand its presence in growing segments such as beauty, food, health and luxury. By divesting the ice cream business, HUL will provide greater flexibility and focus to the segment, ultimately improving shareholder value.

Earlier this year, HUL’s parent company, Unilever PLC, expressed its intention to spin off its global ice cream business across jurisdictions. For the financial year ending March 2024, HUL’s revenue from product sale stood at Rs 59,579 crore.