Nestlé Taps Rothschild to Advise on Sale of Water Division Amid Strategic Refocus

Hadisur Rahman, JadeTimes Staff

H. Rahman is a Jadetimes news reporter covering Business

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Image Source: REUTERS/Pierre Albouy/File photo

Nestlé (NESN.S), the Swiss multinational food and beverage company, has enlisted investment bank Rothschild to advise on a potential sale of its global water division later this year, according to four people familiar with the matter. The move is part of CEO Laurent Freixe’s broader strategy to streamline the company’s vast portfolio and concentrate on high-growth, high-priority brands.

Under Freixe’s leadership, Nestlé is refocusing its efforts on approximately 30 of its 2,000 brands, with particular emphasis on popular products such as Kit-Kat, Nescafe, NAN infant formula, and Maggi noodles and seasonings. The decision to explore the divestment of its water unit aligns with this transformation agenda.

In November 2024, Nestlé announced plans to spin off the water business into a standalone global entity starting January 1, 2025, signaling its openness to strategic partnerships or a full or partial sale. Although a final decision has yet to be made, Nestlé is expected to retain a minority stake in the water business, which includes iconic brands like Perrier and S.Pellegrino.

Sources estimate the valuation of the division could exceed €5 billion ($5.6 billion). Preliminary interest has emerged from private equity firms such as Platinum Equity, Blackstone, One Rock Capital Partners, PAI Partners, and Clayton, Dubilier & Rice (CD&R), with early-stage discussions reportedly underway. However, the sources, who requested anonymity due to the private nature of the talks, caution that no deal is guaranteed.

Nestlé, Rothschild, PAI, CD&R, and Blackstone declined to comment, while Platinum and One Rock did not respond to requests for comment.

The water division has faced operational challenges, particularly with its Perrier brand. According to Vontobel analyst Jean-Philippe Bertschy, issues at several production sources in France and regulatory scrutiny have hindered performance. Nevertheless, Nestlé maintains that all its water products currently meet French safety standards.

Despite these challenges, Nestlé’s water segment reported a 2.9% revenue increase in the first quarter of 2025, totaling 722 million Swiss francs ($874 million) and accounting for less than 4% of the company’s overall revenue.

Bottled water has become an increasingly complex category, given rising global concerns about water scarcity and sluggish market demand since the COVID-19 pandemic. Nestlé previously sold its North American water business in 2021 for $4.3 billion, highlighting its shift toward core segments.

As Nestlé continues to refine its global brand strategy, the potential divestment of its water division underscores its commitment to long-term growth and value creation.