0 
0 Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Unilever is working with advisers to drum up interest from private equity groups for its ice cream division after the consumer goods group announced plans to hive off the business.
Bankers at Morgan Stanley and JPMorgan have reached out to buyout investors to solicit interest for the ice cream business — which includes brands such as Wall’s, Magnum and Ben & Jerry’s — said people familiar with the matter. Deliberations remain at a preliminary stage, they added.
The business is a global leader in its category, and it could be valued roughly between €10bn to €15bn in any deal, said the people familiar with discussions. Barclays has estimated the ice cream unit could be worth as much as €17bn.
The move by the FTSE 100 consumer goods giant comes days after chief executive Hein Schumacher set out plans to split off the ice cream business and cut 7,500 jobs as part of a turnaround plan.
Schumacher on Tuesday said the ice cream business would probably be listed by the end of 2025, but no final decision on how it would be separated had been taken and did not rule out other options that would “maximise returns for shareholders”.
Unilever’s advisers began their outreach to private equity firms only after the company’s formal announcement, one of the people said.
The Netherlands-based ice cream division accounts for about 16 per cent of the group’s overall sales. Schumacher took over last July and has a mandate from the board, including billionaire activist investor Nelson Peltz, to shake up the company after years of lacklustre growth.
Given that Unilever’s default plan to spin off the business would typically be tax free, any bids to acquire it would likely need to offer a substantial premium to the unit’s value in a standalone listing, said one of the people familiar with discussions.
One private equity executive noted a sale could be complicated by Ben & Jerry’s. The brand could cut into the unit’s overall value, despite generating strong cash flows, they said.
Ben & Jerry’s has caused its parent company headaches over the years because of its outspoken stance on political issues. Its attempt to stop selling ice cream in occupied Palestinian territories led to a drawn-out legal dispute between Unilever and the brand’s independent board.
Ben & Jerry’s said in a statement on Wednesday: “Regardless of any new ownership structure, Ben & Jerry’s remains committed to advancing our three-part mission and is well positioned to continue to grow our global company.”
Unilever has sold assets to private equity groups. KKR acquired its spreads business in a €7bn deal in 2017.
CVC, which bought Unilever’s tea business for €4.5bn in 2021, could now explore a bid for the ice cream division, according to people familiar with discussions.
Jettisoning its ice cream division will leave Unilever with four businesses covering beauty and wellbeing, personal care, home care and nutrition.
The combination of Unilever’s sprawling operations — the group also makes Marmite, Hellmann’s and Dove soap, as well as cleaning products Domestos and Cif — and sluggish growth attracted Peltz’s interest. He built a stake in the company before he was awarded a board seat in 2022.
Unilever, Morgan Stanley, JPMorgan and CVC declined to comment.
