Unilever Delays Spin-Off of Ice Cream Business Due to Government Shutdown
Unilever, the consumer goods giant, has announced that it will be delaying the spin-off of its ice cream business, The Magnum Ice Cream Company, due to the ongoing U.S. government shutdown. Despite the setback, Unilever still anticipates completing the divestiture in 2025.
Initially scheduled for November 10, the separation of The Magnum Ice Cream Company was set to create the world’s largest ice cream-only business with $9.3 billion in sales and a robust brand portfolio including popular names like Ben & Jerry’s, Talenti, and Klondike.
However, in a recent filing with the Securities and Exchange Commission (SEC), Unilever cited the inability to obtain clearance from the regulatory agency to declare the registration statement effective as the reason for the delay. Approval from the SEC is crucial for Magnum’s shares to be listed and traded on the New York Stock Exchange.
Despite the setback, Unilever remains committed to the spin-off and is confident in implementing the divestiture in 2025. The company stated in its SEC filing that the preparatory work for the demerger is progressing well.
The government shutdown, which began on October 1, has impacted various operations, including those of the SEC. This has limited the agency’s ability to review and respond to company filings and shareholder proposals, further complicating Unilever’s plans for the spin-off.
Unilever had initiated the process of separating its ice cream business in 2024 as part of a broader restructuring plan aimed at simplifying the conglomerate. The company highlighted the unique characteristics of the ice cream business, such as seasonality and capital intensity, which necessitated a more focused approach.
Lisa Vortsman, the U.S. chief marketing and innovation officer for The Magnum Ice Cream Company, expressed optimism about the spin-off. She emphasized that focusing solely on frozen novelties will enable the new business to prioritize innovation, distribution, and strengthen its supply chain. The spun-out Magnum is expected to benefit from its premium-leaning portfolio and appeal to a wide range of consumers.
Vortsman added, “It’s a new frontier. The focus will allow us to unlock a lot of the opportunities of what these brands are capable of. We have the ability, knowledge, and expertise to take indulgence to a different level.”
While the delay may pose challenges, Unilever remains steadfast in its commitment to the spin-off of its ice cream business and is determined to see the process through in the coming years.
