Platinum Equity Nears Deal for 50% Stake in Nestlé's European Water Unit

Private equity firm Platinum Equity is nearing an agreement to purchase approximately 50% of Nestlé’s European water business, according to a Financial Times report on Wednesday. The proposed deal would value the resulting joint venture at nearly €5 billion ($5.71 billion).

The Proposed Transaction

The report, citing people familiar with the matter, indicated that both companies intend to finalize the agreement before Nestlé (NESN) is scheduled to release its first-half earnings on Thursday. The transaction would see Platinum Equity take a significant co-ownership stake in a portfolio of iconic bottled water brands.

This potential partnership follows Nestlé's announcement in May that it had appointed investment bank Rothschild to explore strategic options for the division. The company stated at the time that it was considering a partnership or partial sale while retaining a stake.

Nestlé's Portfolio Realignment

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The move is consistent with a broader strategic overhaul at Nestlé under CEO Laurent Freixe, who has focused on divesting non-core assets to concentrate on high-growth categories and improve profitability. A partial sale allows Nestlé to de-consolidate a slower-growth business while still benefiting from its future performance through the joint venture.

The European water unit includes several globally recognized premium brands, such as:

• Perrier
• San Pellegrino
• Acqua Panna

For investors, this transaction highlights the ongoing trend of large consumer goods companies streamlining their portfolios. A successful deal could unlock capital for Nestlé to reinvest in its core operations or return to shareholders, while Platinum Equity would gain control of established brands with strong market presence.