“This decision follows a full review by the board of separation options, focused on maximising returns for shareholders, setting the ice-cream business up for success and execution certainty by the end of 2025,” Unilever stated on Thursday.
This decision aligns with trends seen among other firms, including Flutter, the owner of Paddy Power, and travel company Tui, which have moved their primary listings from London to more competitive markets like New York and Frankfurt. Additionally, Ashtead Group, a construction rental firm valued at £27 billion, announced in December its intention to relocate its primary listing to New York.
London has also missed out on significant initial public offerings, such as that of UK chip designer Arm, which chose to list on Wall Street in August 2023, followed by the buy now, pay later company Klarna.
However, Unilever's CEO, Hein Schumacher, emphasized that this decision should not be interpreted as a slight against London or the UK. He explained that the choice of the Netherlands for the primary listing was driven by cost-saving measures for shareholders, given that the main headquarters, manufacturing facilities, and brand intellectual property are already situated there. He further stated, "We remain deeply committed to the UK and plan to make substantial investments in the coming years."
Schumacher noted that the UK government's decision last year to delay indefinitely the implementation of "not for EU" labels on meat and dairy products sold in Britain had safeguarded jobs at Unilever's ice cream factory in Gloucester.
He also mentioned that adjustments to employers' national insurance contributions and the legal minimum wage, which retailers have indicated could increase supplier costs, were part of broader considerations.
Schumacher indicated that consumers should anticipate higher prices for certain items, such as ice cream, due to rising costs of commodities like palm oil, cocoa, and dairy. However, he emphasized that the company would exercise caution regarding pricing in the future, assuring that there would not be universal price hikes.
He cited the launch of bite-sized Magnum Bon Bons last year as an illustration of the company's commitment to providing more budget-friendly options in response to increased costs.
Unilever's shares, listed in London, plummeted by 7% in early trading, making it one of the poorest performers on the FTSE 100 and setting the stage for its worst trading day in three years.
This decline followed the company's announcement of an anticipated slower start to 2025, projecting underlying sales growth between 3% and 5%. For the year ending in December, underlying sales increased by 4.2%, slightly below the forecast of 4.3%.
In March 2024, Unilever first revealed plans to divest its ice cream division as part of a significant restructuring initiative led by Schumacher, which includes the elimination of 7,500 jobs, with more than half already completed.
The spin-off will separate a division responsible for five of the top ten best-selling ice cream brands globally, including Wall’s, Magnum, and Ben & Jerry’s, as well as Cornetto, Viennetta, Carte d’Or, and Breyers, which has a strong presence in the US.
Post-spin-off, Unilever will consist of four divisions: beauty and wellbeing, personal care, home care, and nutrition. The company has appointed Jean-François van Boxmeer, chair of Vodafone, to lead the ice cream business.