The Board of Directors of Hindustan Unilever (HUL) has approved a scheme of arrangement, between HUL and its wholly-owned subsidiary, Kwality Wall’s (KWIL) to demerge HUL’s Ice Cream business into KWIL.
In a regulatory filing, the company stated that pursuant to the scheme, one equity share of KWIL will be allotted for every one equity share held in HUL. Upon demerger and listing of KWIL, the entire shareholding of KWIL will be held directly by shareholders of HUL.
KWIL will be a leading listed ice cream company in India, with an experienced management equipped with greater focus and flexibility to deploy strategies suited to its distinctive business model and market dynamics, thus realising its full potential. Further, the business will continue to be equipped with the portfolio, brand and innovation expertise from the largest global Ice Cream business enabling it to keep winning in the marketplace. Demerger will also facilitate a smoother transition for business as well as our people, the company stated.
The scheme of arrangement is as per provisions of the Companies Act, 2013 and other applicable laws. The demerger is subject to statutory and regulatory approvals.
Rohit Jawa, CEO and Managing Director, HUL said, “Our Ice Cream category is a high-growth business with iconic brands such as ‘Kwality Wall’s’, ‘Cornetto’ and ‘Magnum’, operating in an attractive segment. The demerger will unlock fair value for HUL shareholders and give them the flexibility to stay invested in Ice Cream’s growth journey.”
