Unilever to base ice-cream spinoff in Amsterdam, not London

LONDON: Unilever Plc will list its ice-cream unit primarily in Amsterdam, the consumer goods company said, with London and New York getting secondary listings when the maker of Ben & Jerry’s is spun off this year, reported Bloomberg.

The decision will come as a blow to the London Stock Exchange, which had hoped Unilever could choose it as a single bourse or primary listing. The ice-cream division’s home market of the Netherlands also wanted a sole listing, though the government said it welcomed the announcement on Thursday.

The company has faced intense pressure from the Dutch government to fulfil its previous promise – made when Unilever opted to base itself in the UK in 2020 – to list its wider food business in the Netherlands. It moved the ice cream business’s headquarters to Amsterdam from Rotterdam late last year.

“When you make a commitment as a company you want to live up to that,” CEO Hein Schumacher told reporters. “We’re very committed to the success of the UK economy.”

Even so, the politics are awkward for the British government which is trying to promote the UK as open for business after an unpopular tax-raising budget – and more broadly to talk up a financial sector still feeling the impact of Brexit.

Unilver shares slumped as much as 7.9 percent in London, the most on an intraday basis in three years, pointing to investor unease about the decision.

Speaking earlier, Schumacher said using the three cities where Unilever already has listings would prevent ‘forced technical selling’ by its shareholders and allow them to hold stake in the ice-cream division.

The US is the biggest market for Unilever’s ice-cream brands, which also include Breyers and Magnum, and companies are increasingly flocking to the New York Stock Exchange where there is deeper liquidity and higher valuations.

New triple listings area relatively rare, with dual listings more commonly used to access different pools of capital. Recent examples include Hong Kong-listed CK Infrastructure Holdings Limited, which added a secondary listing in London last year. New York-listed beauty group Coty Inc. began trading in Paris in 2023.

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Other companies, though, have been opting to consolidate trading to cut costs and simplify their corporate structure. Travel group TUI AG ditched its London listing last year, saying liquidity in its shares as concentrated in Frankfurt.

Unilever’s decision to sell or spin off the ice-cream business came after Schumacher last year unveiled a cost-cutting drive that includes shedding 7,500 jobs globally, in a bid to revive flagging performance. He is also trying to shift away from price-led growth where possible after a period of high inflation, focussing on expanding volumes.

The highly seasonal ice-cream business has posed a headache for Unilever, which has had to grapple with the political stances taken by Ben & Jerry’s including over Russia’s invasion of Ukraine and Israel’s military action in Gaza.

Jean-Francois van Boxmeer, a seasoned executive and former CEO at Brewer Heineken NV, has been lined up as chairman elect for the ice-cream business.

The listing plans were announced on the same day Unilever reported a 4 percent increase in underlying sales in the fourth quarter, narrowly beating expectations. The maker of Hellmann’s mayonnaise and Dove soap also forecast modest improvement in profitability in 2025, and started a €1.5 billion ($1.6 billion) share buyback.

However, it warned of a slow start to the year, with subdued market growth and higher commodity costs.

Rival Nestle SA also reported earnings on Thursday and said it’s seeking to lift sales growth from historically low levels by increasing prices for products such as coffee amid escalating commodity costs,, while reining in expenses.