Nestle lines up Rothschild for water unit sale, sources say

Time of India

09-05-2025

HighlightsNestle has engaged Rothschild & Co. to assist in the sale of its water division as part of a strategy to concentrate on its most significant brands under new CEO Laurent Freixe. The water division, which includes well-known brands such as Perrier and S.Pellegrino, is estimated to be valued at over 5 billion euros ($5.6 billion), with private equity firms like Platinum Equity, Blackstone, and One Rock Capital Partners expressing early interest. Challenges in the water division arise from capacity issues, particularly with the Perrier brand, and ongoing regulatory compliance concerns in France regarding water production practices.
Nestle
has hired Rothschild to advise on the sale of its water division later this year, four people familiar with the matter told Reuters, as the Swiss food giant looks to refocus on bigger brands.
Under new CEO Laurent Freixe, Nestle has been trying to narrow its focus to roughly 30 of its 2,000 brands, prioritising labels including Kit-Kat chocolate wafer bars, Nescafe coffee, NAN infant formula and Maggi noodles and seasonings.
In November, the group announced it would carve out its water business into a standalone global unit from January 1, and was open to partnerships and deals. The division has been struggling with capacity issues, the company has said.
Nestle is aiming to keep a stake in the water business that includes brands such as Perrier and S.Pellegrino, the sources said, who spoke on condition of anonymity because the matter is private.
The unit could be valued more than 5 billion euros ($5.6 billion), one of the people added.
Private equity firms including Platinum Equity, Blackstone and One Rock Capital Partners have held early stage conversations about possible offers for the business, two of the people said. Other interested parties include PAI Partners and CD&R, one of these people and a fourth person added.
Conversations with potential bidders are ongoing ahead of a formal process later this year, the people said, cautioning that no deal is guaranteed.
Spokespeople for Rothschild, Nestle, PAI, CD&R and Blackstone declined to comment. One Rock and Platinum did not respond to requests for comment.
Nestle's water business has attracted interest for decades, including from private equity and strategic buyers, Sanjay Bahadur, head of group strategy and business development, told Reuters in an interview in November.
"The main struggle is at Perrier, the rest of the brands are performing well," Vontobel analyst Jean-Philippe Bertschy said. "They have had issues at several (water) sources, and there is an ongoing battle between the French authorities and Nestle."
Nestle has previously said its mineral water products are safe to drink but that in the interest of food safety "practices at some of our waters production sites may not be in line with the applicable regulatory framework".
It has said that all water production at its locations in France is currently compliant with French regulations.
Revenue at the water division increased by 2.9 per cent to 722 million Swiss francs ($874 million) in the first quarter of the year, accounting for less than 4 per cent of Nestle's total revenue, according to its latest results.
Bottled water is a difficult category amid water scarcity concerns and weak industry sales since the COVID-19 pandemic. Nestle in 2021 sold its water business in North America for $4.3 billion.