Unilever demerger delay: Magnum Ice Cream IPO postponed; US government shutdown disrupts SEC approval

British consumer goods giant Unilever has postponed the planned demerger of its Magnum Ice Cream business, citing the ongoing US federal government shutdown as the reason for the delay, according to multiple reports.

The New York Stock Exchange listing for The Magnum Ice Cream Company, which includes brands such as Ben & Jerry's and Cornetto, cannot proceed because the US Securities and Exchange Commission (SEC) is currently unable to declare the registration statement effective, reported news agency AFP.The primary listing had been scheduled for November 10 in Amsterdam, with secondary listings planned in New York and London.

Unilever will retain a 19.9 per cent stake in the standalone ice cream business, as per news agency Reuters.The three-week federal shutdown, the longest full closure in US history, has disrupted IPO approvals and affected several sectors, with economists estimating costs of up to $15 billion per week in lost output. DeepGreenX Group, a Seoul-based green energy company, also withdrew its US direct listing due to the shutdown, highlighting wider market disruption.

Preparatory work for the demerger remains on track, and Unilever has reassured investors that it is committed to completing the spin-off within 2025, although the timeline will be revised, according to Foodbev Media. Anna Farmbrough, UK quality portfolio manager at Unilever investor Ninety One, was quoted by Reuters as saying, “We’re not concerned by the delay. The timing of the listing isn’t especially important in the broader context — what matters is the quality of the underlying business and its long-term growth prospects”.The demerger is part of Unilever’s broader strategy to streamline operations and focus on core brands. Analysts expect the spin-off will benefit both Unilever and Magnum by allowing each business to concentrate on its market segment and growth potential.The delay underscores the regulatory and operational risks companies face during periods of political gridlock. Unilever also confirmed a general meeting of shareholders is still set to address the proposed consolidation of its share capital, which will now see its timeline adjusted in light of the shutdown.The Magnum ice cream business, a test of consumer demand for premium, sugar-rich products in the US, had been positioned for growth with anticipated secondary listings in New York, London and Amsterdam.