Unilever eliminates sweets: is The Magnum Ice Cream Company's IPO worth it?

In November, Unilever will complete one of its most significant corporate decisions: spinning off its ice cream business into a separate company, The Magnum Ice Cream Company, and launching it as an IPO. The listing is scheduled for Amsterdam, London and New York. A month or so before going public, the conflict with the founders of the star brand, Ben & Jerry's, escalated. Is it worth buying Unilever shares and participating in the Magnum IPO?

"For us, ice cream has always been more than just food; it has been a way to spread love and engage others in the fight for equality, justice and a better world. To realize that this is no longer possible at Ben & Jerry's today means to me that I can no longer be a part of the company," Jerry Greenfield, one of the two founders of Ben & Jerry's, wrote on social media X on September 17.

Since its founding in 1978, Ben Cohen and Jerry Greenfield have built the business around a social mission, from supporting LGBTQ+ people to fighting climate change. When Unilever bought the company in 2000, the deal was unique in that it separately enshrined the brand's right to retain an independent board and conduct social policy without interference from the parent company.

For 25 years it's worked pretty well. According to Peter ter Külve, president of Unilever's ice cream business group and head of TMICC, the Ben & Jerry's business has grown more than sixfold since the acquisition, with turnover of more than €1 billion. And €500 million has been invested in its social mission.

This independence made itself felt in 2021, when Ben & Jerry's announced it would stop selling in Israeli settlements in the West Bank, Unilever felt the brand had gone too far and sought to adjust policy. In 2025, the conflict escalated as Unilever fired the CEO of Ben & Jerry's, prompting legal challenges from an independent board.

The co-founders even tried to buy the brand back for a sum of $1.5-2.5 billion, but were rebuffed. "This business is not for sale. It is fully integrated into Unilever - into Magnum Ice Cream Company," Kuhlwe said at an investor day on Sept. 13. Four days later, Greenfield left the company. "Ben & Jerry's has been silenced, pushed aside for fear of hurting those in power," he wrote.

Reuters separately notes that Ben & Jerry's is the only major U.S. company openly criticizing Donald Trump's administration and its policies in the Middle East. Other other U.S. companies and executives have refrained from commenting on White House policy, Reuters notes.

Unilever is one of the largest players in the FMCG market, with a turnover of €60.8 billion in 2024. But the ice cream business has always been out of sync: it is a seasonal product with expensive logistics, requiring millions of freezer cabinets around the world. In March 2024, management announced the separation: ice cream was "too different" from the rest of the portfolio, and synergies were less beneficial than stand-alone.

The Magnum Ice Cream Company (TMICC) has already been operating as a separate entity within Unilever since July 1, 2025, and in November will be fully legally separated and listed on three stock exchanges - Amsterdam, London and New York. Unilever will retain a stake of less than 20% in the new company, planning to sell it off gradually and use the funds to strengthen the balance sheet.

TMICC gets a strong portfolio from Unilever: Magnum with a turnover of €2 billion, the already mentioned Ben & Jerry's with more than €1 billion, Cornetto and Wall's with about a billion euros each. In its presentation, TMICC emphasizes that these four of the world's top five ice cream brands are owned by the company.

The total global ice cream market is estimated at around €75 billion, with a growth forecast of 3-4% annually. This is a part of the global snacks market (€500 bln). The main growth drivers are new consumption formats, expansion in e-commerce (+10% growth per year) and the development of premium products.

The FMCG giant's American depositary receipts were worth about $60 in 2020 and are worth about the same now. Not the most incendiary investment case. The company is more about the day-to-day management of its 400 brands than creating breakthrough technologies or doing big deals. So the foundation of Unilever's investment case is stability.

The company is growing smoothly. For example, its operating profit from 2019 to 2024 is at €9.3-€11.3 billion. And its earnings per share are at €2-3. Perhaps that's why there aren't many recommendations on the stock. SeekingAlpha lists only five recommendations from Wall Street analysts, all of which are limited to "hold" or "buy" suggestions. The average target price of ADR is $70, which is 18% higher than the current price of $59.

Over the past year, since September 2024, the S&P500 index is up more than 17%, while Unilever has lost 9% on the London Stock Exchange.

As one SeekingAlpha user under the nickname Ellsworth Research writes, Unilever is often seen as a stable dividend fund for retirees, where price fluctuations don't matter as long as the cash flows in each quarter. He also points out the company's pluses - the ability to pass on high inflation in prices, familiar consumer behaviors and cash flow growth.

Investor interest revived after the announcement in 2024 to spin off the ice cream business and optimize the brand portfolio, including cutting 7,500 jobs.

The main investment idea around the Magnum Ice Cream business spun off from Unilever is uniqueness. The group is called a pure play instrument in advance: a niche producer of a single product understandable to investors and a narrow specialization. Plus, it is the largest ice cream producer in the world.

According to carve-out statements (financial statements of the spun-off unit), the ice cream business had revenues of €7.9 billion in 2024 and operating profit of €964 million, with a margin of around 12%.

The company itself notes that the business is seasonal, but it is not volatile. According to Ma (data from 2011 to 2024 were analyzed), summer (from May to September) accounts for 52% to 56% of sales, and the rest - for the remaining seven months of the year. And this proportion has been stable for many years, which allows Magnum to make stable forecasts.

At Capital Markets Day in September 2025, management unveiled its strategy: organic growth of 3-5% per year, 35% reduction in product mix, supply chain optimization and €500 million in savings by 2028. Marketing is driven by AI, and at the presentation management said it is factoring the popularity of weight loss products into its strategy. The company operates 36 factories and 210 warehouses, as well as 3 million freezers worldwide. The new smart freezers reduce energy consumption by 35% compared to 2008, well within the ESG agenda. The company should switch to them by 2030.

There are no share price estimates for the IPO yet, nor is there any idea of the company's share price. But if compared to the same multiples as Unilever (P/S - 2.12 P/E - 22.77), the company could be valued at around €15-€17 bln.

What could get in the way? The founders of Magnum-owned brand Ben & Jerry's, with a 50-year track record of fighting for justice and minority rights, wouldn't be themselves if they didn't set something up. A couple weeks ago, as the company was unveiling these growth plans, Ben Cohen held a protest in London demanding that Unilever "release Ben & Jerry's" to protect its social values. Greenfield said he would continue his social struggle outside the company as he could not do it from within.

This article was AI-translated and verified by a human editor