Nestlé has carved out a 50:50 joint venture for its water business, in the culmination of a six-year retreat from bottled water.
More than 30 water and functional hydration brands including S. Pellegrino, Source Perrier and Acqua Panna will be run by a new entity, Peranel.
Announcing the deal alongside its half-year results this morning, Nestlé said Peranel will “have full flexibility to invest in its brands and pursue growth opportunities”.
The deal values Peranel at €4.9bn, with Nestlé to receive around €3bn in cash from Platinum for its 50% stake upon its expected closure in the first half of 2027. The business will continue to be led by Muriel Lienau, its current CEO.
Nestlé CEO Philipp Navratil and Platinum Equity co-president Louis Samson both emphasised the increased focus the new structure would give the waters business.
“We bring unique energy and focus as well as business and operational expertise to the table,” said Samson.
“Combined with Nestlé’s and Peranel’s world-class product development, execution and Marketing capabilities, our joint venture creates a powerful partnership and a very strong team.”
Peranel includes an in-house R&D team with a “robust” development pipeline and around 120 launches to its name since 2022.
Platinum MD Igor Chacartegui added that the PE firm would bring its M&A capabilities to “build upon and sharpen” Peranel’s portfolio.
Nestlé’s financial results largely came as expected this morning, with the Swiss multinational reporting continued progress against its mission to drive volume growth, which it calls real internal growth (RIG).
While headline sales fell 2.5% to CHF 43.1bn (£39.6bn) thanks to a strengthening Swiss Franc, RIG of 1.5% helped to drive organic growth of 3.6%.
Growth was stronger in the second quarter, when volumes picked up pace to grow by 1.8%.
The group’s results showed signs of recovery for Nestlé’s infant formula business following recalls issued in January, as the impact on group organic growth shrank from 90bp in the first quarter to 30bp in Q2.
Despite the progress on sales, Nestlé’s underlying trading operating profit fell 2.8% to CHF 7.1bn in the half, driven by higher coffee and cocoa Prices flowing through the P&L, the impact of the recall, higher marketing spend and tariffs and foreign exchange headwinds.
“This was a reassuring uneventful data point from Nestlé,” said RBC analyst James Edwardes Jones of the results.
”Nestlé’s strategy is designed to put it back on the sort of path we took for granted a few years ago. We believe progress is being made, but it is too early to call it a success.”
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