Hindustan Unilever Limited (HUL) has confirmed its board has “approved in principle” the demerger of its ice cream business in India into an independent listed entity.

The move comes after Unilever shared plans earlier this year to spin off its ice cream business in an effort to make €800 million (US$867.8 million) in cost savings and simplify its portfolio. The company plans to fully exit the category by the end of 2025.

In September, it was revealed that HUL had set up a committee of directors to review its ice cream division. 

HUL says its board had considered “different modes of separation” and that demerging the business was the best solution to “maximize value for all shareholders.”

“Ice Cream is a high-growth business with iconic brands such as Kwality Wall’s, Cornetto and Magnum, operating in an attractive category, and has mid to high single digit profitability,” says HUL in a statement on its website.  

“The demerger of the ice cream business will create a leading one-listed ice cream company in India, which will have a focused management with greater flexibility to deploy strategies suited to its distinctive business model and market dynamics, thus realizing its full potential.”

The company has confirmed shareholders of HUL will receive shares in the new entity in proportion to their shareholding in HUL. The decision to demerge is subject to board and shareholder approval, which will be put before the board early next year.

 A similar plan is expected to be announced for Indonesia as the FMCG giant continues its demerger plans. 

Unilever owns five of the top ten selling global ice cream brands, including Wall’s, Magnum and Ben & Jerry’s. The spin-offs are expected to impact around 7,500 predominantly office-based roles globally.