Unilever shares rose 5.6% moments after the announcement, before paring gains slightly to trade 4.1% higher at 9:20 a.m. London time.
The company said the restructuring will begin immediately and is expected to be completed by the end of 2025. It is expected to achieve total cost savings of about 800 million euros ($868.3 million).
Unilever said the restructuring will allow it to become a “simpler, more focused company”, with four distinct business divisions including beauty and luxury, personal care, home care and nutrition.
The company added that its ice cream division, which generated revenues of €7.9 billion in 2023, would perform better as a standalone business. The ice cream division represented about 13% of Unilever's total revenue of 59.6 billion euros in 2023.
Unilever said that separation plans have not yet been finalized, but that “separation is the most likely path to separation.”
She said that the costs of this step will be determined once the final decision is made.
The move is the most radical yet in a wide-ranging overhaul undertaken by CEO Hein Schumacher, who took the reins of the company in July 2023.
Unilever has faced increasing calls in recent years, including from activist investors, to overhaul its sprawling business amid wide swings in its share price. The stock lost about 6% compared to last year.
Chris Beckett, head of equity research at Quilter Cheviot, asked what impact the restructuring would have on the company's performance more broadly.
“The division in question is known for its low growth compared to Unilever’s overall performance, which suggests that the separation may not significantly change the company’s growth trajectory,” Beckett said.
“Historically, Unilever's decision to sell its tea business has not had a transformative impact on the company's operations or value. It stands to reason that this latest move to split up its ice cream business may follow a similar pattern, and does not provide any material transformation.”
The Ben & Jerry's brand has also proven to be a thorn in the company's side, taking an active stance on various political issues.
In 2023, Unilever faced a US lawsuit alleging that it misled investors by not immediately disclosing Ben & Jerry's' decision to stop selling ice cream in the Israeli-occupied Palestinian territories – a case that was eventually resolved. It was rejectedAccording to Reuters.
Earlier in the year, it also faced backlash over its calls for Ben & Jerry's Back of “stolen” indigenous lands in the United States.
“Devoted student. Bacon advocate. Beer scholar. Troublemaker. Falls down a lot. Typical coffee enthusiast.”