Shares in consumer goods giant Unilever (UL) melted today after it warned that the demerger of its ice cream business has been delayed because of the U.S. federal government shutdown.
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Listing Wait
Unilever is planning to spin-off of the Magnum Ice Cream Company, which also owns Ben & Jerry’s and Cornetto.
The new business will have a primary listing in Amsterdam but will also have secondary listing in New York and London.
The spin-off had been expected to take place next month, with its Dutch listing planned for November 10.
However, Unilever told shareholders today that the U.S. Securities and Exchange Commission is currently unable to approve its registration for a listing on the New York Stock Exchange.
Unilever, however, stressed that it is still “confident” of launching the demerger later this year despite the delay.
The company said: “The preparatory work for the demerger is on track and progressing well, and Unilever remains committed to and confident of implementing the demerger in 2025. Further updates on the revised timetable will be provided as soon as practicable.”
Licking the Market
Unilever said back in September that the unit, to be called the Magnum Ice Cream Company, will see average organic sales growth of between 3% and 5% in the medium term from 2026.
It expects it to command just over a fifth of the around $88 billion global ice cream market and compete with rivals such as Nestle (NSRGF) -backed Froneri.
The ice cream business, which includes four of the world’s top five brands, generated 7.9 billion euros ($9.3 billion) in revenue in 2024 and 1.2 billion euros of adjusted EBITDA.
The split is part of Unilever’s efforts to streamline its product offering to help it boost productivity and growth.
It also wants to move further toward beauty and personal care, with less of a focus on food. It also sold its Vegetarian Butcher plant-based brand earlier this year and confirmed recently that it was exploring the potential sale of its Graze snacking line.
Is UL a Good Stock to Buy Now?
Given the lack of analyst coverage of the UL stock, let’s look at how its share price has performed so far this year. As can be seen below it is up nearly 13%.
