India’s leading FMCG company Hindustan Unilever Limited (HUL) has set up a new subsidiary, Quality Walls (India) Limited (KWIL), for the proposed demerger of its ice cream business. The company recently shared this information through regulatory filing. HUL will have 100% ownership of the new subsidiary KWIL.
Ice Cream Demerger Decision
Hindustan Unilever had approved the demerger of its ice cream business on November 25, 2024. Under this demerger, existing shareholders of HUL will also be given shares in KWIL in proportion to their shareholding.
The company’s board took this decision on the basis of the recommendations of an independent committee. The committee pointed out that the operation of the ice cream business is based on a different operating model. It primarily consists of cold chain infrastructure and an exclusive channel network, which is different from HUL’s other businesses.
Major ice cream brands of the company
HUL’s ice cream business includes popular brands such as Kwality Walls, Cornetto, and Magnum. These brands have a strong hold in the ice cream market in India and are quite popular among the customers.
Purpose of demerger
The main objective of the demerger is to give greater independence and distinct strategic focus to the ice cream business. The committee noted that the separate operating model and infrastructure of the ice cream business was playing a limited role in synergy with HUL’s other product portfolio. With this step, both businesses will be able to utilize their respective capabilities in a better way.
What is the future of KWIL?
After the formation of KWIL, HUL will look to further strengthen its position in the ice cream market. The company will be able to expand its business more efficiently through this new unit.
This step will not only give a different identity to the ice cream business but will also help in taking it to a new level. The formation of KWIL reflects HUL’s strategy to provide better management and operational efficiencies to its diverse businesses.
