Nestlé is reportedly gearing up to divest its global water business, appointing Rothschild & Co as its financial adviser for a potential €5bn sale, according to sources cited by Reuters. The move comes as several private equity firms, including Blackstone, Platinum Equity, and One Rock Capital Partners, have shown interest in the deal. PAI Partners and Clayton, Dubilier & Rice (CD&R) are also reportedly considering bids.
The proposed sale would include iconic brands like Perrier and S. Pellegrino, which Nestlé carved into a standalone division on January 1. This potential divestment aligns with the strategy of new CEO Laurent Freixe to streamline the company’s portfolio, focusing on roughly 30 core brands across categories like confectionery, coffee, and infant nutrition.
Nestlé’s water division generated CHF722 million ($874 million) in Q1 revenue, representing less than 4% of the company’s overall turnover. Despite operational challenges at certain sites, including Perrier’s facilities in France, the division retains high brand equity and a global distribution network, making it an attractive asset for private equity firms focused on carve-outs and operational turnarounds.
Formal discussions with prospective buyers are expected to begin in the coming months, and Nestlé is anticipated to retain a minority stake in the business. This potential sale follows the company’s $4.3bn divestment of its North American water assets in 2021, also to a private equity consortium.