HUL: Will Demerger Of Ice Cream Business Be Value-Accretive?

The ice cream division—which includes Kwality Walls, Magnum and Cornetto brands—is a fraction of India's largest consumer goods business.

<div class="paragraphs"><p>Magnum ice cream. (Source: Company website)</p></div>
Magnum ice cream. (Source: Company website)
Hindustan Unilever Ltd. is examining whether to hold on to its ice cream business in tandem with its parent's restructuring decision, but analysts said it would augur well if the largest consumer goods maker retained it."If HUL looks to demerge it (the ice cream business) at its current size and scale, it would be at a lower EV to sales multiple, versus HUL’s current 8–9 times, so clearly not value-accretive to either demerge or sell...
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