KEY TAKEAWAYS
- Shares of Unilever rose after the consumer products giant announced plans to separate Ben & Jerry’s and its other ice cream brands such as Magnum into a stand-alone business.
- The separation of the ice cream division is expected to affect around 7,500 jobs, mostly office-based roles.
- The restructuring aims to make Unilever a “simpler, more focused company” and is expected to deliver cost savings of about 800 million euros ($868 million).
Shares of Unilever Plc (UL) rose nearly 3% in pre-market trading Tuesday after the consumer products giant announced plans to separate Ben & Jerry’s and its other ice cream brands such as Magnum into a stand-alone business, as part of a restructuring that could affect around 7,500 jobs.
The London-based maker of Dove soap and Hellmann’s mayonnaise said the jobs affected would be “predominantly office-based roles globally.” The consumer goods giant said on Tuesday the restructuring would begin immediately and is expected to be completed by the end of 2025, delivering total cost savings of about 800 million euros ($868 million).
Total restructuring costs are expected to be around 1.2% of group turnover for the next three years, the company said.
Unilever said ice cream production is different from its other operations and a different ownership structure could deliver more growth for the division. “These (differences) include a supply chain and point of sale that support frozen goods, a different channel landscape, more seasonality, and greater capital intensity,” the company said.
The splitting out of the ice cream business will make the company “simpler, more focused,” it said, leaving it to operate in four business groups: Beauty & Wellbeing, Personal Care, Home Care and Nutrition.
The multinational said its ice cream division recorded revenue of 7.9 billion euros ($8.6 billion) in 2023.
Unilever said it expects higher margins following the separation of the ice cream division. “Post separation, Unilever aims to deliver mid-single digit underlying sales growth and modest margin improvement,” it said.
American Depositary Receipts (ADRs) of Unilever were up 2.7% at $49.85 about half an hour before the opening bell.