Nestlé is preparing to launch a formal sale process for its global water business later this year and has appointed Rothschild & Co as financial adviser, amid interest from several PE firms including Blackstone, according to a report by Reuters.
The report cites unnamed sources familiar with the matter as revealing that the buyout giants, along with Platinum Equity, and One Rock Capital Partners, has held preliminary talks over a deal, while PAI Partners and Clayton, Dubilier & Rice (CD&R) are also exploring potential bids.
The carve-out, which includes iconic brands such as Perrier and S Pellegrino, could command a valuation north of €5bn, and forms part of new CEO Laurent Freixe’s broader strategy to streamline the Swiss multinational’s sprawling portfolio. Under Freixe, Nestlé is narrowing its focus to roughly 30 high-priority brands across categories like confectionery, coffee, and infant nutrition, while seeking divestments or partnerships for lower-priority units.
Nestlé carved out the water business into a standalone division effective 1 January and signalled its openness to strategic options, including partial sales. The company is expected to retain a minority stake in any deal, sources said.
Formal engagement with prospective buyers is expected to begin in the coming months.
While Nestlé’s water division reported Q1 revenues of CHF722m ($874m), it accounts for less than 4% of group turnover and has faced operational challenges, particularly at its Perrier sites in France. However, performance across other brands remains solid, and the business retains high brand equity and global distribution scale — factors that are likely to appeal to sponsors with value creation expertise in carve-outs and operational turnaround.
The potential sale follows Nestlé’s $4.3bn divestment of its North American water assets in 2021, also to a private equity consortium.
