Key facts
- Nestle is nearing a deal to sell approximately 50% of its European water business to Platinum Equity.
- The transaction is expected to value the joint venture at nearly €5 billion.
- Nestle is working with Rothschild on the sale process.
- Brands within the business include Perrier and S.Pellegrino.
- Other potential buyers, including PAI Partners and Clayton Dubilier & Rice, have withdrawn from the sale process.
Nestle is reportedly close to selling a significant stake in its European water business to private equity firm Platinum Equity, according to reports from the Financial Times and Bloomberg. The deal is anticipated to value the joint venture at approximately €5 billion ($5.71 billion).
Platinum Equity has emerged as the sole contender after other interested parties, including PAI Partners, Blackstone, KKR, Bain Capital, and Clayton Dubilier & Rice, reportedly withdrew from the sale process. Nestle is working with Rothschild to manage the sale of the unit, which includes well-known brands such as Perrier and S.Pellegrino.
This divestment is part of Nestle's strategic plan to streamline operations and focus on its core product categories. The water division generates about €500 million in earnings, and lenders are preparing between €2 billion and €3 billion in acquisition financing, equating to roughly four to six times EBITDA. The sale process has navigated complexities related to financing and valuation expectations.
The global bottled water market is valued at over $200 billion and is projected for steady growth, though it faces challenges including shifting consumer preferences and increased scrutiny over sustainability and water sourcing practices. Platinum Equity, known for its operational improvement strategies, may seek to optimize the division's supply chain and marketing.