Nestlé has sold a 50% stake in its water business to investment firm Platinum Equity as new CEO Philipp Navratil continues a strategic overhaul of the world’s biggest food group.
The 50:50 joint venture, which includes more than 30 water and functional hydration brands such as San Pellegrino and Perrier, will be known as Peranel. It will continue to be led by current water CEO Muriel Lienau.
The deal values the new entity at €4.9bn, with Nestlé to receive around €3bn in cash from Platinum for the stake. It follows Nestlé selling off its North American water business in 2021.
Announcing the deal alongside its half-year results this morning, Nestlé said Peranel would “have full flexibility to invest in its brands and pursue growth opportunities”.
Nestlé has been seeking a partnership for the division, which accounts for less than 4% of group revenues, since 2024, but the sale has been complicated by a water purity scandal in France.
The new venture is similar in structure to Nestlé’s jv with PAI Partners for the Froneri ice cream business, which has dramatically improved profitability over the past five years.
Navratil and Platinum co-president Louis Samson emphasised this morning the increased focus the new structure would give the waters business.
“By partnering with Platinum, Peranel will be better positioned to execute its strategy with enhanced agility,” Navratil said.
“Through additional focus, it will be well equipped to drive its long-term growth ambitions by strengthening this unique portfolio of international and local brands, with continued investments in innovation, premiumisation, operational excellence and sustainability.”
Samson added: “We will leverage our extensive experience in establishing and supporting standalone companies to create long-term value.”
Platinum MD Igor Chacartegui said the firm would bring its M&A capabilities to “help build upon and sharpen” Peranel’s existing portfolio.
Nestlé’s financial results were as expected this morning, with the Swiss multinational reporting continued progress against its mission to drive volume growth,
While first-half headline sales fell 2.5% to CHF43.1bn (£39.6bn) as a result of a strengthening Swiss franc, volumes were up 1.5% and helped the group to register organic growth of 3.6%.
Growth was stronger in the second quarter, when volumes picked up pace to rise 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 90bps in the first quarter to 30bps in Q2.
Despite the progress on sales, Nestlé’s underlying trading operating profit fell 2.8% to CHF7.1bn 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.
“Nestlé’s strategy is designed to put it back on the sort of path we took for granted a few years ago,” RBC analyst James Edwardes Jones said. “We believe progress is being made, but it is too early to call it a success.”
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