Nestlé has confirmed negotiations to divest its water division, with a deal anticipated to exceed $5.6 billion (€5 billion).
This strategic decision follows the company’s announcement in November to transform its water division—which includes prominent brands like Perrier, Vittel, and S.Pellegrino—into a standalone global entity.
Under the leadership of new CEO Laurent Freixe, Nestlé has shifted its focus toward major brands, including KitKat, Nespresso, and Nescafé.
Freixe highlighted that “The big message is focus on the core” when he assumed his position in August last year.
Intense Competition Ahead
The Swiss multinational has engaged Rothschild to assist with the sale, which has already attracted significant global interest.
Private equity firms such as Blackstone, Platinum Equity, and CD&R have shown considerable interest in this potential acquisition, and discussions with prospective bidders are reportedly ongoing, with a formal process expected later this year.
Nestlé’s water division generated CHF722 million (€934 million) in Q1 of this year, positioning it as a lucrative investment for potential buyers. Though, notably, that revenue represents less than 4% of Nestlé’s total earnings.
Controversies Surrounding the Division
Despite its profitability, Nestlé’s water division has faced numerous controversies recently. Concerns have arisen regarding the contamination of bottled water brands such as Perrier, Contrex, Vittel, and Hépar, with issues involving bacteria, pesticides, and PFAS.
Additionally, the corporation has received criticism for the processing methods used for its two flagship brands, Perrier and Vittel. The company was accused of marketing bottled tap water as mineral water and employing illegal treatment techniques to do so.
Wider Industry Sell-off Trends
Nestlé’s decision to divest its water division aligns with similar trends observed among other major corporations.
Just last month, Unilever announced its intention to sell Vegetarian Butcher, following its previous announcements regarding the sale of Unox and Zwan in December of last year.
