The Magnum Ice Cream Company (TMICC) saw a slight decline in its shares upon debut after the completion of its spin-off from Unilever amidst an ongoing dispute with one of its well-known brands. The Netherlands-based company’s shares are now trading for the first time post-demerger, establishing itself as the largest ice cream company globally, with a grip on approximately one fifth of the global market.
The primary Magnum shares in Amsterdam opened at €12.20, below the reference price of €12.80 set by the EuroNext exchange. Despite this initial dip, the shares eventually settled slightly above, indicating a market value of €7.9bn, just under £7bn. TMICC is also listed on the stock exchanges in London and New York.
Unilever’s stock experienced a 3.1% decline on the FTSE 100 following the spin-off. This demerger allows Unilever, headquartered in London, to focus on its diverse range of consumer brands like Marmite, Dove soap, and Domestos. The decision to separate the ice cream division, made early in 2024, aims to concentrate on a market projected to grow up to 4% annually until 2029.
However, TMICC has been entangled in a prolonged dispute with the co-founders of Ben & Jerry’s, now under the TMICC umbrella and contributing 14% of the group’s revenue. Unilever acquired the US brand in 2000, but tensions persist despite the establishment of an independent board to safeguard the brand’s social mission. The most notable conflict arose in 2021 when Ben & Jerry’s opted not to sell ice cream in Israeli-occupied Palestinian territories due to values misalignment. Unilever responded by selling the business to its licensee in Israel, escalating tensions with repeated demands by Ben & Jerry’s co-founders to repurchase the brand.
TMICC and Unilever contend that Ben & Jerry’s mission has strayed beyond the boundaries set in 2000, evolving into one-sided advocacy on divisive issues posing risks to reputation and business. Currently, TMICC is endeavoring to remove the chair of Ben & Jerry’s independent board, Anuradha Mittal, citing her failure to meet criteria post internal investigations. A review of the Ben & Jerry’s Foundation, where Mittal serves as a trustee, revealed governance and financial control deficiencies. TMICC warned of potential funding withdrawal from the charitable arm unless issues are addressed. Amidst these challenges, Peter ter Kulve, Magnum’s CEO, expressed pride in TMICC’s independence, emphasizing agility, focus, and ambition.
Reflecting on the demerger, Hargreaves Lansdown equity analyst Aarin Chiekrie noted that TMICC is already generating positive free cash flow and profits independently. While the balance sheet remains solid, dividends are deferred until 2027 as the company establishes itself as a standalone entity. This delay in dividends may exert downward pressure on the share price in the short term, particularly for investment funds focused on dividends holding Unilever stock, now receiving TMICC shares that may need to be sold to comply with investment mandates.
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