Dive Brief:
- Nestlé has sold half its waters business to private equity firm Platinum Equity in a $3.4 billion deal that creates a new premium beverage business called Peranel.
- Peranel is a 50:50 joint venture between Nestlé and Platinum Equity and includes more than 30 brands including S.Pellegrino, Source Perrier and Essentia as well as Nestlé Pure Life and other local water brands.
- The deal will make Peranel a fully independent company headquartered in Paris with “full flexibility to invest in brands and pursue growth opportunities,” Nestlé said in a statement.
Dive Insight:
The sale is the latest move from Nestlé CEO Philipp Navratil to aggressively review the food giant's portfolio to shed underperforming assets and chase growth opportunities in areas such as frozen foods.
The Swiss food and beverage giant first announced its plan to shift waters and premium beverages into its own business in 2024, part of a series of changes meant to cut $2.8 billion in costs by 2027.
More recently, new CEO Philipp Navratil has worked to prune Nestlé’s portfolio even further. Earlier this year, it sold Blue Bottle Coffee to Centurium Capital and the remainder of its ice cream business to Froneri. It’s also looking to sell off its mainstream vitamins, minerals and supplements business.
The new deal, expected to be completed in the first half of 2027, gives Peranel an enterprise value of 4.9 billion euros, or about $5.6 billion. The company will be headquartered in Paris and led by Muriel Lienau, who is currently CEO of the business.
“By partnering with Platinum Equity, Peranel will be better positioned to execute its strategy with enhanced agility," Philipp Navratil, Nestlé CEO, said in a statement. “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, premiumization, operational excellence and sustainability.”
The waters and premium beverage business only made up about 4% of Nestlé’s business, and has been struggling for several years.
Nestlé on Thursday reported H1 sales of 43 billion swiss francs, or about $52.6 billion, marking a 2.5% decrease year over year.
