Nestlé is reportedly making headway with a process to sell a stake in its water business.
People familiar with the issue told Bloomberg yesterday (22 January) the food and drink major was asking potential buyers to put forward first-round bids for the shareholding this month.
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The San Pellegrino and Acqua Panna water producer declined to comment on the story when approached by Just Drinks.
Reports from Bloomberg in March suggested private-equity players including Blackstone, KKR, Bain Capital, Clayton Dubilier & Rice and PAI Partners were mulling over bids for the water unit.
According to the publication, the Swiss multinational has hired Rothschild & Co. to assist with the sale. The bank also declined to comment on the matter when approached by Just Drinks.
The unnamed sources also told Bloomberg bankers were working on debt financing of €2-3bn to fund a possible transaction.
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By GlobalDataWith discussions ongoing, the size of the stake sale or how long the transaction might take has not yet been decided, they said.
Nestlé revealed plans to make its waters and “premium beverages” activities a stand-alone business over a year ago.
In February, then CEO Lauren Friexe reiterated the company was open to a partnership as opposed to a full sale of the waters unit, “to realise the potential of the category”.
Muriel Lienau, CEO of the stand-alone Nestlé Waters and Premium Beverages entity, set up in early 2025, told Just Drinks late last year the business was then “still in the preparation phase” and that the next step would be to enter talks.
The Milo brand owner already has two joint venture tie-ups on the food side of the business. Both of these deals, one in ice cream and the other in pizza, have been with private-equity group PAI Partners.
A benefit of a partnership, Lienau said last year, was the investment opportunities it brings, which can help the group accelerate innovation plans and grow its global presence in a fast-paced market.
“You have new products coming all the time,” Lienau says. “We want really to have the same basis as the rest of the market, to be able to bring new innovation, to support them, to roll [them] out globally. And this is where a partnership will make a lot of sense to support this acceleration.”
A challenging business
The Vevey-headquartered group’s waters unit has faced plenty of hurdles over the past couple of years, some of which have stemmed since it admitted to breaking French laws in how it treated bottled mineral water against contamination in early 2024.
Most recently in December, the group’s waters business was sued by local French competitor Bonneval Emergence for alleged “unfair competition”.
Local publication Le Monde on Wednesday (17 December) reported it had learned Bonneval Emergence had filed a suit against the Perrier water maker with the economic activities court in Nanterre.
The group also asked the court to pause sales of Nestlé’s bottled water brands, including Vittel, Contrex and Perrier, and to recall bottles, with a €1m ($1.2m) penalty for each day of delay.
It had asked for €1.6bn in damages to cover the alleged economic disadvantage it has experienced due to the “unlawful” existence of those Nestlé products in France and other markets.
The group also argued Nestlé’s water products have benefited “unduly” from being able to use the “natural mineral waters” term for its products.
Bonneval Emergence, which does business under the name Bonneval Waters, declined to comment on the issue but confirmed to Just Drinks it had filed the lawsuit, as well as the accuracy of the Le Monde report.
In mid-November, a French court ruled Nestlé could continue to market its Perrier water products in France using the term “natural mineral water”.
The Nanterre judicial court rejected a request from French consumer rights group UFC Que-Choisir to remove Perrier water products from the market.
Earlier in December, batches of Perrier bottled mineral waters were blocked from the market by local authorities in France following a bacterial analysis of one of Nestlé’s wells in Vergèze.
An investigative report from Radio France shared by Franceinfo then suggested two of the group’s mineral water wells had been shut for a five-day period at the end of November after new bacterial contamination was found at its Vergèze site in the Gard department.
When questioned on the topic by Just Drinks, Nestlé’s water business said: “As is normal in these situations, some pallets were blocked at our site.
“These will remain at our site until further notice from the relevant authority”.
In May, French authorities ordered the company to remove system filters from its Vergèze and Vosges sites in France, which produce bottled water brands such as Perrier and Contrex.
Two months on, in a separate probe, the headquarters of Nestlé’s operations of France were raided by local authorities. The investigation was a result of a complaint from consumer rights group Foodwatch, the French government’s General Directorate for Competition, Consumer Affairs and Fraud Control (DGCCRF) said at the time.
