Unilever has decided to delay the spin-off of its ice cream business due to the ongoing U.S. government shutdown. Despite this setback, the company still anticipates completing the divestiture by 2025.
The original plan was to separate The Magnum Ice Cream Company on Nov. 10, establishing thelargest ice cream-only business in the world with a sales revenue of $9.3 billion and a brand portfolio including Ben & Jerry’s, Talenti, and Klondike.
However, in a filing submitted to the Securities and Exchange Commission on Tuesday, Unilever disclosed that they have not received approval from the regulatory agency to proceed with the spin-off. The SEC’s endorsement is crucial for Magnum’s shares to be listed and traded on the New York Stock Exchange.
“The necessary preparations for the Demerger are advancing as planned, and Unilever is fully committed to executing the spin-off in 2025,” Unilever stated in its SEC filing.
The U.S. government shutdown, which began on Oct. 1, has hindered operations, with Congress failing to reach a consensus on a federal budget. As a result, the SEC’s activities have been limited, impacting the agency’s ability to review and respond to corporate filings and shareholder proposals.
In an effort to streamline its operations, Unilever initiated plans in 2024 to separate its ice cream division as part of a broader restructuring strategy aimed at simplifying its business model. The company highlighted ice cream’s unique characteristics, necessitating a more focused approach due to its seasonality and higher capital requirements.
Lisa Vortsman, the U.S. chief marketing and innovation officer for The Magnum Ice Cream Company, recently shared with Food Dive that focusing solely on frozen novelties will enable the new entity to prioritize innovation, distribution, and enhance its supply chain.
The spun-off Magnum is expected to leverage its premium brand portfolio and product mix, catering to a diverse consumer base.
“This marks a new chapter for us. The dedicated focus will unlock a plethora of opportunities for these brands,” Vortsman commented. “We have the expertise and knowledge to elevate indulgence to new heights.”