(Dec 8): Unilever plc’s spinoff The Magnum Ice Cream Co was valued at €7.8 billion (US$9.1 billion or $11.78 billion) in its market debut on Monday, after a separation aimed at giving the world’s biggest ice cream company a platform to revive its performance as a standalone firm.
Magnum shares opened at €12.20 in Amsterdam on Monday, before rising to trade slightly above the technical reference price of €12.80. Shares also opened in London, and were set to start trading in New York later Monday as part of the triple listing. The reference price is a figure calculated by Magnum and Unilever’s advisers that was used as an indicative price ahead of the start of trading.
The company, which owns the Ben & Jerry’s and Cornetto brands, is debuting a month later than initially planned after the listing was delayed by the US government shutdown. Magnum is planning to use its newfound independence to focus on boosting its growth, after having been Unilever’s least profitable division.
“Our mission is very clear: the business was not growing fast enough. It needed to grow 1% to 2% faster and profitability was 400, 500 basis points too low,” Magnum’s chief executive officer Peter ter Kulve said in an interview Monday morning before markets opened.
Magnum’s market capitalisation was lower than some analysts expected. Analysts at Barclays plc wrote in an October note that the firm could be valued between €10.1 billion and €10.8 billion, valuing it at nine to 9.5 times its expected 2026 earnings before interest, taxes, depreciation and amortization.
For Unilever’s shareholders, the spinoff comes after years of lacklustre share price performance. Its stock opened trading at £43.42 per share in London on Monday. Investors are being handed one share in Magnum for each five shares they own in the parent company.
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Unilever decided to split off its ice cream unit last year as part of efforts to streamline its business and revive growth. The ice cream business’ high production and storage costs have weighed on margins in recent years. Magnum is targeting annual organic sales growth of 3% to 5% from next year, broadly in line with the global market, and free cash flow of between €800 million and €1 billion in 2028 and 2029.
The ice cream category is “perceived to have challenges” from health-conscious consumers and weight-loss drugs, as well as being a capital-intensive business, Jefferies analysts including David Hayes wrote in a note last week. But they see the management team as “well regarded” and say the company can now reinvest in growth, after focusing on returns and cash under Unilever.
The debut brings a lengthy separation process for Magnum to a close. The unit was briefly considered for a sale to private equity in 2024, then Unilever settled on a three-exchange spinoff that was further delayed because of the US government shutdown.
Trading could be impacted by technical selling over the coming days. Unlike Unilever, Magnum is unlikely to be included in the UK’s FTSE 100 index or the Stoxx Europe 50 index, which could lead funds designed to track those benchmarks forced to sell the shares, JPMorgan Chase & Co analysts led by Pankaj Gupta wrote in a note.
It would be an example of so-called flow back — when investors are handed a share that falls outside of their mandate, forcing them to sell it. In total there will be an expected selling of about 30 million shares as a result of index changes, the JPMorgan analysts wrote. The company will have about 612.3 million shares in issue when it lists, filings show.
Shares are set to start trading across all three exchanges under the symbol MICC.
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