Nestle Stock: Water Unit Attracts Major Investment Interest

Nestlé is currently in negotiations with several financial investors regarding the future of its struggling water division, which could be valued at approximately €5 billion. The Swiss food giant is discussing potential partnerships with prominent investment firms including PAI Partners, Bain Capital, Clayton Dubilier & Rice, and KKR & Co. for its premium water brands portfolio that includes Perrier, San Pellegrino, and Vittel. Rather than pursuing a complete divestiture, Nestlé plans to retain a stake in the water business, signaling a strategic partnership approach. This aligns with CEO Laurent Freixe's November announcement about seeking partnerships for this division, which has been operating as a separate unit since early 2025 to facilitate such arrangements. Nestlé is expected to appoint investment banks as advisors in the coming days, though the outcome of these discussions remains uncertain.

Building on Previous Partnership Success

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Nestlé's strategy of forming alliances with financial investors follows established successful models within the company. The food conglomerate has maintained a fruitful joint venture called Froneri in the ice cream sector with PAI Partners-one of the current potential water division investors-since 2016. This collaboration expanded in 2023 when the two enterprises created another joint venture for the European frozen pizza business. These positive experiences likely serve as a template for the water division's future and explain why PAI Partners appears as a leading contender. This strategic realignment represents Nestlé's efforts to reposition its underperforming water segment while benefiting from investors' financial and strategic expertise.