Nestlé ‘presses on with water stake sale’

Nestlé has reportedly taken another step forward with the sale of a stake in its waters business, with several private-equity firms said to have moved to the next stage of bidding, Just Food reports.

People familiar with the matter told The Financial Times that PAI, KKR and CD&R have moved to the next round in bidding for a 50% stake in the waters unit which owns brands like San Pellegrino.

Platinum Equity has also reportedly “shown interest” in the stake sale which is said to value the waters business at €5bn ($5.8bn).

According to The Financial Times, Nestlé has been working with investment bankers to explore a stake sale in its waters business.

Nestlé declined to comment on the matter when approached by Just Drinks.

CD&R and PAI also declined to comment, while KKR and Platinum Equity had not responded to this publication at the time of writing.

In January, a report from Bloomberg indicated the Swiss food and drink giant was reportedly making headway with a process to sell the water business stake.

People familiar with the issue then told the publication that Nestlé was asking potential buyers to put forward first-round bids for the shareholding that month.

The Acqua Panna water producer declined to comment on the story when approached by Just Drinks at the time.

Reports from Bloomberg in March last year suggested private-equity players including Blackstone, KKR, Bain Capital, Clayton Dubilier & Rice and PAI Partners were mulling over bids for the water unit.

According to the publication, the Swiss multinational had hired Rothschild & Co. to assist with the sale. The bank also declined to comment on the matter when approached by Just Drinks in January.

Nestlé is undergoing plenty of changes at the moment since Phillip Navratil took on the CEO role in September.

In October, he laid out a plan to cut 16,000 jobs across the business over the next two years.

The reductions will affect 12,000 white-collar workers across the group, and 4,000 in manufacturing and within the supply chain.

The announcement was made alongside the group’s nine-month results presentation at the time, and looks to boost annual savings to SFr1bn by the end of 2027, up from a previous target of SFr500m as part of the so-called fuel-for-growth strategy already in place at Nestlé.

In it annual results in February, the group also announced a rejig of the company’s structure around four focus areas: coffee, pet food, nutrition, and food and snacks.

It also revealed plans to exit the remaining ice-cream business that do not sit within its Froneri joint venture with private-equity firm PAI Partners.