Nestlé has agreed to place its global water business into a €4.9bn joint venture as the KitKat and Nescafé maker posted better-than-expected second-quarter sales growth.
The company will form a 50:50 partnership with US investment firm Platinum Equity, which is expected to generate approximately €3bn in cash proceeds for Nestlé.
The new business, named Peranel, will bring together more than 30 brands sold across 120 countries, including S.Pellegrino, Acqua Panna, Source Perrier and Nestlé Pure Life, alongside a number of local bottled water brands.
The transaction, which remains subject to employee consultation and regulatory approval, is expected to complete during the first half of 2027.
Nestlé said the partnership would create a more focused standalone player capable of accelerating growth across water and premium beverages.
Philipp Navratil, Chief Executive, said working with Platinum Equity would give Peranel “enhanced agility” to carry out its growth strategy.
Nestlé reported organic sales growth of 3.7 per cent during its second quarter, marginally ahead of analysts’ expectations of 3.6 per cent.
Prices increased by 1.9 per cent, while real internal growth – the company’s measure of sales volumes and product mix – rose by 1.8 per cent.
Nestlé upgraded its full-year organic growth forecast to between three per cent and four per cent, compared with its previous guidance of around three per cent.
For the first half, organic sales increased by 3.6 per cent, driven by pricing growth of 2.1 per cent and real internal growth of 1.5 per cent.
Reported sales fell 2.5 per cent to CHF43.1bn, as foreign exchange movements reduced revenue by 6.2 per cent.
Organic retail sales increased by 3.6 per cent.
Ecommerce surged 12.2 per cent and represented 21.8 per cent of total group sales.
Coffee led category growth during the half, rising 7.5 per cent on the back of Nescafé.
Food and snacks grew 3.7 per cent, supported by Maggi, KitKat, and Milo.
Petcare sales increased 2.7 per cent.
Nutrition declined 1.2 per cent as Nestlé continued to feel the impact of its infant formula recall.
Nestlé’s reported sales were affected by foreign exchange movements.
However, the company’s organic retail sales and ecommerce sales showed significant growth.
The company’s coffee segment led the category growth, driven by the popularity of Nescafé.
Food and snacks also showed growth, supported by popular brands like KitKat and Maggi.
Petcare sales increased, but nutrition declined due to the infant formula recall.
