Nestle Sells Half of Waters Unit to Platinum Equity in $3.4 Billion Joint-Venture Deal — 2nd Update

By Aimee Look

Nestle agreed to offload half of its water unit--home to Perrier and San Pellegrino--to private equity group Platinum Equity in a $3.4 billion deal as it continues to shoulder hefty costs from its restructuring efforts.

The Swiss consumer-goods company said it would create a joint venture with billionaire Tom Gores's Platinum Equity and shed a 50% stake in its Waters and Beverages business for 3 billion euros in cash ($3.42 billion). The new business--called Peranel--is valued at 4.9 billion euros, including cash and debt, with the deal expected to close in the first half of next year.

The agreement is the latest step in a wider restructuring push that drove up costs in the first half of the year, weighing on profits.

The maker of KitKat chocolate bars and Nescafe coffee said in its results Thursday that net profit for the period was 3.47 billion Swiss francs ($4.26 billion), missing company-compiled analysts' estimates that the figure would remain relatively unchanged on year at 5.07 billion francs. Nestle's shares slumped 6.3% in early morning trading.

The company had previously indicated that it was aiming to sell a few brands. In February, Nestle said it would shed its remaining ice-cream business into its Froneri joint venture, in which it keeps a 50% stake.

Nestle has also been seeking buyers for Nature's Bounty and other brands in its vitamins business as a way to improve sales growth, pivoting toward higher-end products such as Solgar and Garden of Life.

On Thursday, Nestle said it expects to sell mainstream and value brands within its vitamins arm by the first half of next year. The loss on the disposal of the segment is expected to be around 1.3 billion francs.

Chief Executive Officer Philipp Navratil is undertaking an overhaul of the maker of Nescafe coffee and Purina pet food in a bid to steady the ship after a string of setbacks, underperformance and management upheaval in recent years.

His efforts since taking the helm in September have focused on slimming down its sizeable portfolio, mirroring moves by rivals in the sector. Nestle has said it is cutting around 16,000 jobs, has sold off brands and is reorganizing the business around four main categories--coffee, pet care, nutrition and food.

Other consumer-goods businesses have also been aiming to get leaner. Dove soap-maker Unilever spun off its ice-cream business last year into the Magnum Ice Cream Co., and struck a deal with spice-maker McCormick to combine food businesses. Similarly, U.K. sugar-to-clothing company Associated British Foods said it was separating budget fashion retailer Primark from its food arm.

Nestle's organic sales in the second quarter, also reported Thursday, rose 3.7% on year. The result was driven by pricing, which was up 1.9%, while growth in sales volumes--called real internal growth--was 1.8%. Overall sales were 21.79 billion francs for the second quarter compared with 21.63 billion francs a year earlier and analysts' expectations of 21.71 billion francs, according to company-compiled estimates.

Write to Aimee Look at aimee.look@wsj.com

(END) Dow Jones Newswires

July 23, 2026 04:28 ET (08:28 GMT)