Nestlé to sell €5bn water division

Nestlé planning to offload $5bn water division.

(Image: Getty/Hyrma)

Food and beverage giant Nestlé plans to focus on flagship brands including KitKat and NespressoNestlé is currently in talks to sell part of its water arm, in a deal expected to top $5.6bn (€5bn).

The move comes after it announced in November that it would carve out its water division, which includes Perrier, Vittel and S.Pellegrino, into a standalone global entity, under the leadership of Muriel Lienau, head of Nestlé Waters Europe. This includes exploring partnership opportunities.

Under new CEO, Laurent Freixe, Nestlé’s focus has been on big-name brands including KitKat, Nespresso and Nescafe.

“The big message is focus on the core,” said Freixe when appointed in August last year.

Big competitionThe Swiss multinational has hired Rothschild to advise on the sale, which has already gained significant international attention.

Private equity firms including Blackstone, Platinum Equity and CD&R have shown interest in a potential deal, and conversations with potential bidders are said to be ongoing, ahead of a formal process later this year.

Nestle’s water division generated CHF722m (€934m) in Q1 of this year, making it a profitable investment for buyers. However, that figure amounts to less than 4% of Nestlé’s overall revenue.

ScandalsThough profitable, Nestlé’s water division has been dogged by scandal in recent years, with concerns that its bottled water brands Perrier, Contrex, Vittel, and Hépar were contaminated with bacteria, pesticides, and PFAS.

The multinational has also come under criticism for processing methods used in the production of two of its biggest water brands, Perrier and Vittel. The company was accused of selling bottled tap water as mineral water and using illegal treatment methods to do so.

Sell-off trend spreadsNestlé’s move to offload its water division follows similar shifts by other blue chip companies.

Just last month, Unilever announced its decision to sell Vegetarian Butcher, following its announcement to sell Unox and Zwan in December of last year.

Nestlé to sell off water division. (Image: Nestlé S.A.)