Nestle sheds water stake as it eyes faster growth

Nestle on Thursday said it expects to raise around **€3 billion** ($3.43 billion) from a joint venture with investment firm Platinum Equity for its water and premium beverages business, a long-awaited deal it has been courting since 2024. Nestle and Platinum Equity would each own **50%** of the joint venture, which will be named **Peranel**, the company said. Its portfolio will comprise more than 30 brands sold in 120 countries, including **S.Pellegrino, Source Perrier and Acqua Panna, Nestle Pure Life** and other major local water brands. Nestle said in a statement the transaction assigned an enterprise value of **€4.9 billion** to the new business, which implied cash proceeds of **€3 billion**. It did not elaborate further and the company declined to discuss the deal's financial details. Consumer goods companies from **Unilever** to **Reckitt** are increasingly whittling away brands and businesses under investor pressure to focus on highest growth segments. Nestle's water business, while profitable, has lagged its brands such as **Nescafe** and **KitKat** in terms of margins and growth potential. The group's CEO **Philipp Navratil** has sought since his appointment last year to improve growth and profitability by focusing on core brands. Reuters reported in May last year that Nestle had hired Rothschild to explore a partnership or sale of a stake in its European water business while retaining part ownership. "Nestle'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." Nestle also posted slightly better than expected second-quarter organic sales growth as prices and sales volumes increased. The world's biggest packaged food company said it now expects full-year organic sales to grow **3% to 4%**, instead of its previous target of **"around 3%"**. Organic sales in the quarter ended **June 30**, which exclude exchange rate effects and acquisitions, rose **3.7%**, the group said. Analysts had on average expected organic sales growth of **3.6%**. Nestle's **1.9%** price increases were ahead of the average analyst estimate of **1.8%**. Real internal growth - or sales volume - expanded **1.8%**, meeting expectations. Nestle said its second-half underlying trading operating profit margin would be higher than the first half of the year thanks to lower coffee and cocoa costs. It said, however, that it had also seen "some higher transportation and energy costs arising from the Middle East conflict." "The areas seeing the most impact from the Middle East conflict are in our Asia, Oceania and Africa business," finance chief **Anna Manz** told journalists. "We haven't quantified the impact from Middle East conflict for the second half," she added.

Nestle sheds water stake as it eyes faster growth

Nestle forms 50-50 water joint venture with Platinum Equity

Quarterly sales beat expectations and full-year outlook is raised

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