
Hindustan Unilever Ltd (HUL) saw its shares surge by 1% in early trade on Monday after the company announced plans to demerge its ice-cream business into a separate, listed entity. The decision reflects HUL’s strategy to maximize value for its shareholders.
In an exchange filing, HUL stated that its board has granted in-principle approval for the demerger and has authorized the management to take preparatory steps, including drafting a scheme of arrangement for the separation.
Shareholders to Benefit:
HUL confirmed that, subject to necessary approvals, shareholders will receive shares in the new entity in proportion to their shareholding in HUL. The company plans to finalize the scheme of demerger and present it to the board early next year for approval.
Strategic Move:
The board explored various modes of separating the ice-cream business before deciding on a demerger to enhance value creation for shareholders. HUL’s ice-cream business, which includes popular brands such as Kwality Wall’s, has been a strong performer within the FMCG giant’s portfolio.
As of 9:15 AM, HUL shares were trading 1% higher, reflecting investor optimism about the potential unlocking of value through this strategic initiative.