CNBC's UK Exchange newsletter: The world’s biggest ice cream maker hopes the future’s sweet

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The dispatch

Lovers of crystal pick brands similar Magnum, Cornetto, Carte D'Or, Ben & Jerry's, Breyers and Wall's can now ain shares successful them straight pursuing Monday's demerger of The Magnum Ice Cream Company (TMICC) from erstwhile genitor Unilever.

In 1 of the splashiest banal marketplace events of 2025, shares of TMICC debuted connected Amsterdam's Euronext, and there are besides secondary listings in London and New York — wherever Peter ter Kulve, the main executive, volition ringing the opening bell today. (He'll besides beryllium unrecorded connected CNBC's Squawk connected the Street astatine 3 p.m. GMT/10 a.m. ET.)

The listing, Euronext's largest this year, valued TMICC, the world's biggest crystal pick producer, astatine 7.8 billion euros ($9.1 billion).

But what are the prospects for the newly demerged concern and for Unilever itself?

Neither question is easy answered.

First: TMICC, wherever adjacent the stock terms prospects are unpredictable successful the abbreviated term. The institution itself has warned that, arsenic it volition not suffice for indices specified arsenic the FTSE 100, determination could beryllium archetypal selling by tracker funds incapable to clasp the stock. The deficiency of a dividend successful 2026 volition besides deter immoderate investors.

Unilever and its banking advisors sought to address this by mounting a debased notation terms for TMICC shares and, accordingly, immoderate bargain hunters whitethorn measurement in. And it is cheap: including debt, TMICC is worthy small much than the next-biggest subordinate successful the $87-billion planetary crystal pick market, Froneri, a British-based associated task betwixt Nestle and PAI Partners, the French backstage equity firm. It has an 11% planetary marketplace stock compared with TMICC's 21%.

In presumption of trading prospects, determination are besides headwinds, astir evidently the increasing popularity of weight-loss drugs.

Ahead of the demerger, ter Kulve played down these risks, arguing that for years TMICC has evolved its portfolio to see much products with reduced sugar, higher amounts of macromolecule oregon successful which portions tin beryllium controlled. Examples see Breyers CarbSmart crystal cream, which is higher successful protein, or Ben & Jerry's move from pint cartons to crystal pick connected sticks. 

The CEO is targeting medium-term integrated yearly income maturation of 3%-5%, compared with the long-term average of 3% achieved nether Unilever.

There whitethorn besides beryllium opportunities for TMICC, arsenic a much focused business, to increase investments in its proviso chain, wherever determination was small overlap with Unilever's different businesses, perchance leaving it neglected. That goes for the concern communicative much broadly.

As Chris Beckett, user staples expert astatine the wealthiness manager Quilter Cheviot, enactment it: "While Magnum hasn't thrived nether Unilever's ownership, determination is immoderate anticipation that the revitalised absorption team — albeit predominantly made up of ex-Unilever employees — will nutrient a amended operating performance."

There is different imaginable thorn successful ter Kulve's side. Ben & Jerry's, bought successful April 2000 from founders Ben Cohen and Jerry Greenfield, has been progressively problematic.

In 2021, the brace concisely stopped Unilever from selling the merchandise successful Israeli settlements successful the West Bank, earlier the ensuing backlash prompted Unilever to merchantability the brand's Israeli limb to a section licensee. Greenfield near the concern successful September this year, portion past month, TMICC said that Anuradha Mittal, seat of the Ben & Jerry's autarkic board, "no longer meets the criteria" to serve, without giving much details.

In a emblematic portion of Dutch plain speaking, ter Kulve told the Financial Times connected Monday the brace should "hand implicit to a caller generation."

He warned that TMICC mightiness nary longer proceed contributing to the Ben & Jerry's charitable instauration unless firm governance failures identified successful a caller audit were addressed.

The spat is different crushed wherefore Unilever volition beryllium blessed to offload TMICC — where returns person been little than in its different businesses, adjacent though it is, for now, retaining a 19.9% stake, which volition beryllium sold implicit the adjacent 5 years.

A agelong overdue re-rating?

The bigger question, though, is whether this latest reshaping of Unilever volition pb to a re-rating by the market. I person been covering this company's fortunes for much than 30 years and person witnessed countless attempts to execute this.

Coming in, determination were the purchases successful 2000 of Ben & Jerry's, Slim-Fast (since sold) and Best Foods, which brought Unilever the Hellmann's brand; the ill-fated $1 billion acquisition of Dollar Shave Club in 2016; and the 2019 acquisition of the steadfast snacking marque Graze, again since sold.

Going retired of the doorway person been Unilever's speciality chemicals business, sold to ICI for £5 cardinal ($6.66 billion) successful 1997; its spreads concern — including the Flora marque — which was sold to KKR for 6.7 billion euros in 2017 and, much recently, the £3.8 cardinal merchantability successful 2021 of Unilever's achromatic beverage business, proprietor of iconic brands specified arsenic PG Tips and Liptons, to the backstage equity steadfast CVC.

Not to notation a full big of smaller disposals, specified arsenic Ambrosia creamed atom and Brown & Polson cornflour, some sold to Premier Foods successful 2003 and Birds Eye frozen food, offloaded to Permira successful 2006.

In between, determination person been galore strategical overhauls.

Terry Smith, whose concern steadfast Fundsmith is 1 of Unilever's apical 10 shareholders, noted past twelvemonth they person included 2010's Unilever Sustainable Living Plan, 2016's Connected 4 Growth and 2022's Unilever Compass Strategy for Sustainable Growth.

Yet nary mattered arsenic overmuch arsenic the move, 5 years ago, to a azygous institution operation that ended the 90-year-old statement of 2 parents — the British Unilever plc and the Dutch Unilever NV — and provided much firm flexibility.

The demerger of TMICC feels astir arsenic fundamental.

At a stroke, it raises the prime of Unilever's earnings, leaving it adjacent much focused connected the 2 twelve oregon truthful brands that relationship for three-quarters of its yearly sales. Of these, a twelve person yearly income exceeding 1 cardinal euros, including Dove, Omo and Domestos. 

As Fernando Fernandez, the newish main enforcement and a antheral plainly successful a hurry, noted connected LinkedIn connected Monday: "For Unilever, this milestone allows america to support sharpening our absorption successful gathering a portfolio of powerfulness brands with unparalleled geographical footprint and superior maturation prospects."

Notably, conscionable 2 of these 1-billion-euro brands — Knorr and Hellmann's — reside successful its nutrient division. Other nutrient brands, including Marmite, Colman's mustard and Bovril, are already said to beryllium connected the block. Should the spin-off of TMICC not effect successful a re-rating, it would beryllium nary surprise if Unilever became a axenic quality and well-being, idiosyncratic attraction and location attraction business, with its entire foods division a distant memory.

Top TV picks connected CNBC

Huge fiscal stimulus and debased rates are going to assistance request and maturation globally, but protectionism and geopolitical unrest volition rise inflation, says Wellington Management's Paul Skinner.

— Katrina Bishop

Need to know

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[PRO] A UK question institution that could spot its stock terms multiply. Alyx Wood, co-founder and main concern serviceman of Kernow Asset Management — a contrarian banal picker — said the banal is "materially undervalued," and gives it an upside of 468% implicit the adjacent 5 years.

— Yeo Boon Ping, Katrina Bishop

Quote of the week

 We should get, starting astatine the December [BoE] meeting, a overmuch clearer way to complaint cuts successful the U.K. … The U.K. marketplace has not done severely this year, but those complaint cuts really springiness a decent communicative for america to look guardant into adjacent year.
— George Godber, money manager, Polar Capital UK Value Opportunities Fund

In the markets

London-listed stocks reversed people this week, with the FTSE 100 losing 0.62% since past Wednesday. The scale closed 0.03% little astatine 9642.01 connected Tuesday, pulling backmost from reaching a landmark 10,000 points.

Shares of WPP rallied 6.3% connected Tuesday aft the advertizing and communications elephantine landed a lucrative declaration to tally the U.K. government's advertisement strategy. The four-year deal, which is reportedly worthy up to £2 cardinal ($2.7 billion), volition spot WPP-owned bureau Wavemaker oversee a wide scope of media and advertizing campaigns for the government.

Meanwhile, Unilever was different 1 of the FTSE's cardinal risers connected Tuesday, rising 3.6% arsenic its crystal pick spin-off The Magnum Ice Cream Company debuted connected banal exchanges successful London, New York and Amsterdam connected Monday.

The British pound was marginally little against the greenback implicit the week, trading astatine $1.3296 connected Tuesday, compared with past Wednesday's $1.3352.

Yields connected the U.K. government's benchmark 10-year bonds — besides known arsenic gilts — roseate implicit the aforesaid period, up to 4.511% from 4.480%.

The show of the Financial Times Stock Exchange 100 Index implicit the past year.

— Hugh Leask

Coming up

Dec. 12: U.K. GDP monthly estimation and commercialized information for October
Dec. 15: Rightmove House Price Index for December
Dec. 16: Unemployment information for October

— Katrina Bishop