Ben & Jerry's maker Unilever will spin out its ice cream business and has chosen Amsterdam for its primary listing, it said, in a blow to British finance minister Rachel Reeves' efforts to attract IPOs to London.
Unilever announced the details of the listing alongside annual results and a €1.5-billion ($1.6 billion) share buyback.
Its shares dropped nearly 7% in London where the group has its main listing, wiping off about £8.5 billion of its market value, after Unilever also said it expected a slower start to 2025 due to subdued market growth in the near term.
CEO Hein Schumacher had laid out cost cuts at the company last year, including separating the ice cream division through a demerger and cutting thousands of jobs to address years of underperformance.
The ice cream business, which includes the Magnum and Wall's brands, will have secondary listings in London and New York. It generated turnover of 8.3 billion euros ($8.6 billion) in 2024.
The decision will likely be a blow to Britain's Reeves, who met executives from Unilever last September, with the official register of meetings describing it as a discussion on investment in the United Kingdom and capital markets and reforms.
Reeves' office did not immediately respond to a request for comment.
Business minister Jonathan Reynolds told reporters that Britain had more work to do to attract stock market listings in addition to reforms last year and other measures taken by the London Stock Exchange.
Britain is still hoping to attract online fast-fashion retailer Shein, which Reuters has reported is expected to list in London for $50 billion.
Business Climate
In the Netherlands, Dirk Beljaarts, the minister of economic affairs, said the decision by Unilever confirmed the company's "confidence in the Netherlands and underscores the competitiveness and attractiveness of our business climate".
It would have been difficult for Reeves to woo Unilever given it had made commitments to the Dutch government back in 2020 that it would choose the Netherlands if it ever planned to spin off its food and refreshment business. Unilever had picked London as its main stock listing and tax venue when it simplified its dual legal structure.
Its shares also trade in Amsterdam and New York.
UK officials implemented listing reforms last year aimed at helping London compete with New York and the European Union following Brexit, but the changes have yet to yield a noticeable turnaround in initial public offerings amid a long spell of outflows from UK funds.
Equipment rental firm Ashtead Group, for instance, announced plans in December to shift its listing to New York, where many companies believe they can get a higher valuation.
Unilever will continue to invest in Britain, Schumacher said on a call with reporters, saying the choice of Amsterdam for the ice cream business listing was about operating logic, minimising costs and commitments made to the Dutch government.
Demerger
A demerger of the business had been the most likely option, Barclays analysts said, as such assets in consumer staples often perform well because they are pure plays.
Consumer health firm Haleon, spun out from drugmaker GSK in 2022, has seen its market value grow by about £5 billion to £35.4 billion since its listing.
Jean-Francois van Boxmeer has been appointed chair designate for the separated ice cream business, Unilever said.
The group forecast 2025 underlying sales growth to be within its multi-year range of 3%-5%.
Tineke Frikkee, a portfolio manager at Waverton Investment Management, a Unilever investor, said Thursday's decline in shares was down to a lack of positive momentum for the first half of 2025 and a risk quarterly forecasts will not be met.
Unilever reported fourth-quarter underlying sales growth of 4%, compared with a 4.1% forecast by analysts in a company-compiled poll.
Annual Highlights
The company's beauty and wellbeing unit saw underlying sales growth of 6.5%, with volume growth of 5.1%, driven by the performance across its Power Brands.
The personal care division registered 5.2% sales growth with a 3.1% volume increase, led by innovation-led sales growth of deodorants.
Underlying sales in home care unit increased 2.9%, with 4.0% volume growth, which more than offset the price decline linked to commodity cost deflation.
The company's food business reported underlying sales growth of 2.6%, with nearly flat volume growth of 0.2% amid a market slowdown and moderating prices.
In developed markets, which accounted for 42% of group turnover, underlying sales grew 4.4%, while volumes increased 3.3%.
The company saw strong performance in North America, led by Beauty & Wellbeing, and a major improvement in Europe, driven by Home Care and Personal Care. Moreover, price growth moderated to 1.1%.
News by Reuters, additional reporting by ESM.
