Unilever has confirmed the spin-off of its ice-cream units in India and Indonesia ahead of the planned demerger by the UK-headquartered parent company.

Intentions to demerge Unilever’s group-wide ice-cream business into a separate listed entity first surfaced in March and while alternative options had been touted, the FMCG giant indicated last week it will proceed with the split.

“Unilever remains on track to deliver our comprehensive €800m ($840.5m) productivity programme and the separation of ice cream by the end of 2025,” the company said in a regulatory filing with the London Stock Exchange on 22 November.

Ice cream in India will also be spun off from the divisional Hindustan Unilever business with a listing in the local market, according to an official statement yesterday (25 November), a plan to be approved by the board and shareholders early in the new year.

Meanwhile, Unilever is seemingly aiming for a similar option for ice cream in Indonesia as details emerged in a separate statement yesterday pertaining to a “sale contract” with an internal holding company.

“In-principle approval” to a demerger of ice cream by Hindustan Unilever (HUL) was granted by the board at a meeting yesterday.

“Subject to the necessary approvals and procedures to be followed in accordance with the applicable laws, it is proposed that the shareholders of HUL will receive shares in the new entity in proportion to their shareholding in HUL,” the statement read.

“The board considered different modes of separation of the ice-cream business and after due consideration, with a view to maximise value for all the shareholders, the board has accorded in-principle approval to demerge the business.”

Unilever’s ice-cream brands in India, such as Kwality Wall’s, Cornetto and Magnum, have “mid-to-high single-digit profitability”, according to the statement, which added a listing will provide a “focused management with greater flexibility to deploy strategies suited to its distinctive business model”.

The statement continued: “A separate listed entity will unlock fair value for HUL shareholders and give them the flexibility to stay invested in ice cream’s growth journey.”

Over in Indonesia, Unilever said a “business transfer agreement” was signed on 22 November with PT The Magnum Ice Cream Indonesia, or the purchaser.

Otherwise referred to as BTA, the purchaser has an “affiliate relationship with the company” [Unilever] as the holding entity for ice cream.

The Indonesia statement said: “At the time of implementation and completion of the transaction, the purchaser will no longer have an affiliate relationship with the company.”

That transaction, valued at Rp7trln ($440.2m) including assets, also needs the approval of shareholders at a yet to be scheduled meeting.

Unilever said the transferred business would have a market value of more than Rp2.55trln and a net book value of around Rp1.99trln.

“The sale of the ice-cream business is undertaken in view of the announced plan by the Unilever Group to separate its global ice-cream business,” the Indonesia statement read.

“Such a sale will enable the company to realise the value of its investment in the Indonesian ice-cream business and return such value to its shareholders in the short term, and re-focus on its remaining core businesses to enhance value to shareholders in the long term.”

A report emerged last week that discounted the option of offloading Unilever's ice-cream business to a private-equity investor, as had earlier been speculated in the media as a possible route.

While jobs are at risk in Europe as part of the FMCG major's productivity programme, Unilever has confirmed some roles will be transferred to ice cream post the demerger transaction.