Unilever's ownership of quirky ice cream maker Ben & Jerry's is coming to the end of a sometimes rocky road. The British consumer products company announced Tuesday that it plans to spin off the brand and other ice cream businesses.
In a statement, Unilever said the decision was based on the board's view that the company should focus on “great brands with strong positions in highly attractive categories with complementary operating models.” He said that The spin-off will include Unilever's ice cream brands, including Magnum and Cornetto.
It added that the ice cream business “has a very different operating model and, as a result, the board has determined that separating ice cream will best serve the future growth of both ice cream and Unilever.”
Unilever's other ice cream brands include Cornetto, Magnum, and Kwality Wall's. According to Bloomberg, the company's profit margins from mass-producing ice cream are less than half the profits it makes from selling personal care products. Unilever is also known for brands such as Dove soap, Hellman's, Pepsodent, and Vaseline.
The separation comes after activist investor Nelson Peltz joined Unilever's board in 2022 to drive transformation at the consumer products company. According to Reuters, Peltz supported the appointment of Hein Schumacher as Unilever's new CEO in 2023 and Schumacher's strategic plan to revitalize the business. .
Unilever, which has 128,000 employees worldwide, also announced on Tuesday it would launch a “productivity program” that is expected to lead to the elimination of around 7,500 mainly office-based jobs. The spin-off of the ice cream division is expected to be completed by the end of 2025.
chill factor
The spinoff marks the end of an unusual partnership that began in 2000, when Unilever acquired Ben & Jerry's for $326 million. The Vermont-based ice cream maker stipulated at the time of the acquisition that it would create an independent board of directors, allowing it to continue to take an openly progressive stance on social and political issues. became.
Those views sometimes caused Friction with Unilever. In 2022, for example, Ben & Jerry's sued its parent company for selling its operations in Israel and the country's West Bank to a local licensee, arguing that the sale violated Unilever's commitments. Discontinue sales of your own products It will be held in the region in 2021 as a show of support for the Palestinian cause.
Spinning off Ben & Jerry's and its other ice cream brands will allow Unilever to focus on growing revenue in other divisions, the company said.
“Ice cream has distinct characteristics compared to Unilever's other businesses,” Unilever said. “These include the supply chain and point of sale that support frozen goods, a different channel environment, more seasonality, and greater capital intensity.”
Unilever said that while other options to separate Ben & Jerry's and other ice cream brands would be considered, a “de-merger” of the ice cream business to create a new publicly traded company was the most likely route. .
–From a report by the Associated Press.