Unilever Spin-off Notes

May 18, 2024 Update

On March 19, 2024, Unilever (UL) announced that it will spin-off its ice cream business by the end of 2025 (European companies take forever to complete their spin-offs!). The initial press release didn’t indicate whether the transaction will be tax free.

The separation of Ice Cream will create a world-leading business with brands that together generating sales of €7.9 billion in 2023 (13% of total sales). The business has five of the top 10 selling global ice cream brands including Wall’s, Magnum and Ben & Jerry’s, with exposure in both the in-home and out-of-home segments across a global footprint.

I think this is an interesting transaction. Given that the Ice Cream business only represents 13% of sales, the spin-off could experience indiscriminate selling pressure. Nonetheless, I don’t think the situation is actionable today.