Unilever is to close an ice-cream factory in Bulgaria ahead of the spin-off of the consumer goods giant’s business in the sector this year.
Production will be switched to a facility in Romania when the Bulgaria site shuts its doors in April, a Unilever spokesperson said, declining to confirm if the closure was related to any consolidation exercise planned for ice cream.
Unilever first announced its intentions to separate the ice-cream division in March last year in what it referred to as a demerger. The London-listed group put to bed speculation in November that it might pursue a sale of the ice-cream division to private investors as it cemented its plans for a spin-off via a separate listing by the end of 2025.
The Ben & Jerry’s and Magnum owner also confirmed in November that it would separate its ice-cream business unit in India from the Hindustan Unilever subsidiary and pursue a local listing.
Similarly in Indonesia, Unilever said it had entered a “business transfer agreement” with PT The Magnum Ice Cream Indonesia, effectively a local holding company that will house the ice-cream unit and assets.
Unilever declined to comment on the impact on jobs from the closure of the factory in Bulgaria.
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By GlobalDataThe spokesperson said: “Unilever decided to relocate the ice-cream production from Veliko Tarnovo in Bulgaria to other factories within the group network, which also includes Betty Ice in Suceava, Romania, by April 2025.
“This move aims to facilitate production synergies and ensure sustainable development for the long term. The variety of products for Bulgarian consumers will remain unchanged, and Unilever will continue to invest in the region, providing favourite products and making a positive societal impact.”
Meanwhile, it was reported on Friday (31 January) Unilever was mulling a New York listing for its ice-cream division, once separated.
However, the report from Bloomberg, quoting unnamed sources, also suggested the FMCG major may consider a dual listing in the US and Europe, perhaps London or Amsterdam.
In a separate response, Unilever said it had no comment to make on the report. A spokesperson said: “No decision has been made and therefore we’re not commenting.”
The report sparked a commentary from the European consumer staples team at Barclays, led by Warren Ackerman, assessing the implications for such listings in the US and Europe.
“We would prefer a clean sale or JV of ice cream, with proceeds returned in a sizeable buyback,” the team wrote in a research note yesterday (3 February).
They suggested a listing in Amsterdam could have tax implications, amounting to a “potential liability” of €2bn ($2.1bn), which Barclays estimated would push up the valuation multiple to around 15 times EBITDA “to compensate for tax leakage”.
The team added: “We would favour a joint UK/US listing because in our view it would reduce the flow-back risk given the UK is Unilever’s primary listing and an estimated 70% of its shareholders are US/UK domiciled.
“There would be inevitable pushback from the Dutch government given there have [been] some assurances from Unilever management around the listing domicile.
“Listing only in the US might result eventually into a higher valuation (although not a given due to current GLP-1 concern on food stocks in the US) but the flow-back risk would likely be more significant as some UK and European shareholders might be forced sellers.”
Ice cream is a sizeable business for Unilever. The division generated €7bn in revenue over the first nine months of 2024, generating underlying sales growth (USG) of 3.6%.
The nutrition unit, which houses the remaining parts of Unilever’s food portfolio such as the Marmite and Knorr’s brands, posted €9.9bn in sales, corresponding to a USG of 2.6%.
Group revenue was €46.4bn, with USG standing at 1.3%.
