Unilever has scrapped plans to sell its €15bn ice cream division, which includes the Ben & Jerry’s, Magnum, and Wall’s brands, to private equity firms, opting instead to spin off the business into a separate publicly listed company, according to a report by the Financial Times.
The decision marks a shift in strategy under CEO Hein Schumacher, who has made restructuring the company a key focus of his turnaround efforts.
In March, Unilever announced its intention to separate the ice cream division, and initially explored selling the unit to private equity firms but faced challenges due to its size, seasonal nature, and complex supply chain, according to sources familiar with the process.
Private equity interest cooled after prospective buyers struggled to identify ways to manage the business more effectively than Unilever’s current setup. An executive from one firm noted that “the supply chain is very specific to ice cream,” complicating any potential overhaul.
The division, which contributes 16% of Unilever’s total sales, also faced hurdles related to brand performance and political controversies. Ben & Jerry’s, known for its outspoken stances, recently filed a legal complaint against Unilever, alleging interference with its independent board and criticism over the brand’s support for Palestinian refugees.
Despite these challenges, Unilever reported robust growth for its ice cream brands in its third-quarter update, with sales up 9.8% year-on-year, outperforming analyst expectations of 4.3%.
Schumacher has reiterated that separating the ice cream business remains central to his turnaround strategy, alongside broader cost-cutting measures such as eliminating 7,500 jobs, primarily in Europe. While private equity interest has waned, he has indicated that a demerger, likely completed by the end of 2025, is the most viable path forward.
Unilever has a history of divesting assets to private equity, including the €7bn sale of its spreads business to KKR in 2017 and the €4.5bn sale of its tea division to CVC in 2021.
