Nestle SA and Coca-Cola have both denied reports that they plan a joint venture in the bottled water business.

Speculation rose from an analyst's report, which suggested that Nestle SA and Coca-Cola were considering whether to form a joint venture in the water business, costing about $2 billion.

The report by beverage analyst Bill Pecoriello of Sanford C. Bernstein & Co claims that the combination would be similar to the partnership Coca-Cola has with Proctor & Gamble in the juice segment.

Nestle, in a 50-50 partnership would contribute its Poland Spring and Arrowhead brands in the US as well as its European brands Perrier, Vittel and San Pellegrino. Coca-Cola would give its US brand Dasani and international water brands Bonaqua and Ciel.

The water venture would also have to share profits with bottlers, said Pecoriello and he also suggested in his report the bottlers would have to be persuaded to drop some existing water brands to distribute those of the venture.

But talking to Dow Jones Business News, Nestle spokesman Francois Xavier Perroud said: "Presently there are no plans for a joint venture in the water business."

Coca-Cola spokesman Ben Deutsch has also denied Pecoriello's theory and said: "It is pure speculation."