Unilever investors to get shares in new ice cream company – what you need to know

Consumer goods firm Unilever is one of the largest companies on the UK stock market and is about to go through a significant change. Find out what is happening when and what it means for shareholders.

What’s happening?

Last year, Unilever announced plans to separate its ice cream business and focus on four different areas – beauty and wellbeing, personal care, home care and foods. It subsequently confirmed the ice cream arm would be spun off as a separately listed entity, with Unilever retaining a 19.9% stake.

The split is about to happen, and qualifying Unilever shareholders will get free shares in the business to be called The Magnum Ice Cream Company (TMICC). It is the home to such brands as Magnum, Ben & Jerry’s, Wall’s and Cornetto, among others.

Anyone holding Unilever shares as of 10pm on 5 December will in the following days receive one share in The Magnum Ice Cream Company for every five Unilever shares they hold.

The demerger is expected to complete on 6 December, with The Magnum Ice Cream Company shares being issued to qualifying Unilever shareholders on the 8 December.

Stock in The Magnum Ice Cream Company will commence trading in London, New York and Amsterdam on 8 December and be available to trade for new investors from that day.

After the demerger, Unilever also plans to launch a share consolidation – combining its existing shares into a smaller number of new shares. This is scheduled to happen on 9 December.

Why is Unilever spinning off the ice cream arm?

Unilever is in the middle of a turnaround programme, launched in 2024 by former chief executive Hein Schumacher and continued under his successor Fernando Fernandez.

This has involved job cuts and other efficiencies and a focus on the so-called Power Brands which account for more than 75% of its turnover. These include household names like Hellman’s, Knorr and Domestos.

It has increased investment in brand and product marketing and continues to streamline the business by selling non-core brands and buying new ones.

Unilever believes the ice cream demerger will make the group simpler to understand and allow it to focus on the remaining businesses which it believes are more complementary of each other.

Sales of ice cream are seasonal; and producing and storing ice cream ties up lots of money and involves different logistics and facilities than most other goods on the shelves.  

What happens to Unilever shares after the demerger?

Once the demerger happens, Unilever will no longer own TMICC other than having a minority shareholding. Under normal circumstances, its share price would change to reflect the revised structure of its business. Unilever is taking steps to try and avoid this happening.

Unilever is keen for shareholders to be able to compare previous earnings and dividends with future ones in a straightforward way and not have to do adjustments in calculations. That’s why it is going to reduce the number of shares in issue – called a share consolidation.

The ratio for the share consolidation, or how many new shares each existing shareholder will get for the ones they already hold, is expected to be determined through a comparison of the price of the shares immediately prior to, and following, the demerger.