(Feb 13): Ben & Jerry's maker Unilever said on Thursday it would demerge its ice cream business and picked Amsterdam as its primary listing venue, with London and New York as secondary listings, in a blow to British finance minister Rachel Reeves.

Unilever announced the details of the listing structure alongside annual results and a €1.5 billion (US$1.57 billion or RM7 billion) share buyback. Shares sank 5% in early trading in London, the second biggest loser on the FTSE 100.

CEO Hein Schumacher had laid out cost cuts at the company last year, including separating the ice cream division and cutting thousands of jobs to address years of underperformance.

The ice cream business — which includes the Magnum and Wall's brands — generated turnover of €8.3 billion in 2024.

The company said it would list the business on all three stock exchanges. It told Reuters that Amsterdam, where its business is headquartered, would be its primary listing.

That decision will likely be a blow to British finance minister Rachel Reeves, who has reportedly been meeting Unilever to discuss the listing of its ice cream business. Reeves' office did not immediately respond to a request for comment.

It was positive for the Netherlands, however, with Dirk Beljaarts, the Dutch minister of economic affairs, saying the decision confirmed Unilever's "confidence in the Netherlands and underscores the competitiveness and attractiveness of our business climate."

UK officials implemented a suite of listing reforms last year aimed at helping London compete with New York and the European Union after Brexit.

This easing of listing rules has yet to yield a noticeable turnaround in initial public offerings amid a long spell of outflows from UK funds.

Equipment rental firm and FTSE 100 member Ashtead Group in December, for instance, announced plans to shift to New York, where many companies believe they can get a higher valuation.

Unilever's shares, whose primary listing is in London, trade on the same three stock exchanges where it plans to list its ice cream business.

"This decision follows a full review by the Board of separation options," Unilever said in a statement.

A demerger of the business had been the mostly likely option, Barclays analysts have said, as such assets in consumer staples often perform well because they are pure plays.

Consumer health firm Haleon, which demerged from drugmaker GSK in 2022, has seen its market value grow by about £5 billion to £35.36 billion since its listing.

Some analysts had preferred a clean sale or joint venture of Unilever's ice cream division, or a joint US/UK listing as it reduced the risk of flow-back — when investors sell shares in a foreign company back to investors who live in the country.

Unilever reported fourth-quarter underlying sales growth of 4% on Thursday, compared with a 4.1% forecast by analysts in a company-compiled poll.

Jean-Francois van Boxmeer has been appointed chair designate for the separated ice cream business, it said on Thursday.

The British company expects a slower start to 2025 due to subdued market growth in the near term, although it forecast its 2025 underlying sales growth to be within its multi-year range of 3%-5%.

"The comprehensive productivity programme we announced in March is being implemented at pace and we are ahead of plan," Schumacher said in a statement.

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