Nestlé has employed Rothschild to advise on the sale of its water division later this yr, 4 folks acquainted with the matter informed Reuters, because the Swiss meals big appears to refocus on greater manufacturers.
Beneath new CEO Laurent Freixe, Nestlé has been attempting to slim its focus to roughly 30 of its 2,000 manufacturers, prioritising labels together with Equipment-Kat chocolate wafer bars, Nescafe espresso, NAN toddler formulation and Maggi noodles and seasonings.
In November, the group introduced it will carve out its water enterprise right into a standalone international unit from 1 January, and was open to partnerships and offers. The division has been scuffling with capability points, the corporate has stated.
Nestlé is aiming to maintain a stake within the water enterprise that features manufacturers equivalent to Perrier and S.Pellegrino, the sources stated, who spoke on situation of anonymity as a result of the matter is non-public.
The unit could possibly be valued greater than €5 billion ($5.6 billion), one of many folks added.
Personal fairness corporations together with Platinum Fairness, Blackstone and One Rock Capital Companions have held early stage conversations about potential presents for the enterprise, two of the folks stated. Different events embrace PAI Companions and CD&R, one in every of these folks and a fourth individual added.
Conversations with potential bidders are ongoing forward of a proper course of later this yr, the folks stated, cautioning that no deal is assured.
Spokespeople for Rothschild, Nestlé, PAI, CD&R and Blackstone declined to remark. One Rock and Platinum didn’t reply to requests for remark.
Water Enterprise
Nestlé’s water enterprise has attracted curiosity for many years, together with from non-public fairness and strategic patrons, Sanjay Bahadur, head of group technique and enterprise improvement, informed Reuters in an interview in November.
“The primary battle is at Perrier, the remainder of the manufacturers are performing nicely,” Vontobel analyst Jean-Philippe Bertschy stated. “They’ve had points at a number of (water) sources, and there’s an ongoing battle between the French authorities and Nestlé.”
Nestle has beforehand stated its mineral water merchandise are protected to drink however that within the curiosity of meals security “practices at a few of our waters manufacturing websites might not be in keeping with the relevant regulatory framework”.
It has stated that each one water manufacturing at its places in France is presently compliant with French rules.
Income on the water division elevated by 2.9% to CHF 722 million ($874 million) within the first quarter of the yr, accounting for lower than 4% of Nestlé’s whole income, in response to its newest outcomes.
Bottled water is a tough class amid water shortage considerations and weak trade gross sales for the reason that COVID-19 pandemic. Nestlé in 2021 bought its water enterprise in North America for $4.3 billion.
