The maker of Magnum and Ben & Jerry’s, Unilever (NYSE:UL) plans to spin off its ice cream unit into a standalone business, as part of a new cost-savings program, that would also cut 7,500 jobs, the consumer goods company said Tuesday.
The separation will begin immediately, and is expected by the end of 2025.
Unilever (UL) expects the restructuring programme to deliver total cost savings of around €800 million over the next three years, more than offsetting estimated operational dis-synergies from the separation of the ice cream unit. The proposed changes are expected to impact around 7,500 predominantly office-based roles globally, with total restructuring costs now anticipated to be around 1.2% of Group turnover for the next three years, up from the around 1% previously communicated.
The unit, which boasts of some of the global ice cream brands including Wall’s, Magnum and Ben & Jerry’s, with exposure in both the in-home and out-of-home segments across a global footprint, delivered a turnover of €7.9 billion in 2023.
Post separation, Unilever aims to deliver mid-single digit underlying sales growth and modest margin improvement, it said in a statement.
“A demerger of ice cream is the most likely separation route, and in that case we expect the company to operate with a capital structure in line with comparable listed companies,” the company said, adding, other options for separation will be considered to maximize returns for shareholders.
The London-based company in October outlined a plan to streamline business and drive growth, after admitting that “performance in recent years has not matched potential.”