Nestlé is preparing to launch a formal sale process for its global water division, which includes flagship brands Perrier and S.Pellegrino, in a transaction that could be valued at over €5bn, according to sources cited by Reuters.

The Swiss multinational has appointed Rothschild & Co as financial adviser, with the process expected to kick off in the coming months. The deal has already attracted early interest from several private equity firms, including Blackstone, Platinum Equity, One Rock Capital Partners, PAI Partners, and Clayton, Dubilier & Rice.

Nestlé carved out the water business into a standalone division effective 1 January 2025 and is exploring strategic options, including a partial sale. Sources say the company is likely to retain a minority stake post-transaction.

The divestment is part of new CEO Laurent Freixe’s broader strategy to streamline Nestlé’s global portfolio and focus on 30 core brands across high-margin categories such as confectionery, coffee, and infant nutrition. Brands and divisions outside this priority group are being earmarked for divestment, restructuring, or partnerships.

Despite reporting CHF722m ($874m) in Q1 revenue, Nestlé’s water division accounts for less than 4% of group turnover and has faced operational challenges, particularly at Perrier production sites in France. However, the division continues to benefit from strong brand recognition and a global distribution footprint—characteristics that are likely to appeal to private equity bidders with expertise in carve-outs and turnaround strategies.

The move follows Nestlé’s $4.3bn sale of its North American water assets in 2021, also to a private equity consortium.

Source: Reuters