ZURICH, July 23 (Reuters) – Nestle said on Thursday it expects to raise around €3 billion ($3.43 billion) from spinning off its water business into a 50-50 joint venture with U.S. investment firm Platinum Equity.
The new company, to be called Peranel, will include the Source Perrier, S.Pellegrino and Acqua Panna premium water brands, as well as the Nestle Pure Life business and local water businesses.
The transaction, set to close in the first half of next year, gives an enterprise value to Peranel of €4.9 billion, implying cash proceeds at closing for Nestle of approximately €3.0 billion, the Swiss food maker said.
Nestle has long been exploring new options for its waters business grappling with legal and regulatory fallout in France over unauthorised water treatment and mounting environmental criticism over water use and sustainability concerns.
CEO Philipp Navratil has also been seeking to improve growth and profitability at Nestle, which reported its first-half results on Thursday, by focussing on core brands at the company, whose business spans infant formula, coffee and pet foods.
“By partnering with Platinum Equity, Peranel will be better positioned to execute its strategy with enhanced agility,” Navratil said in a statement.
($1 = 0.8748 euros)
(Reporting by John Revill; Editing by Christopher Cushing and Subhranshu Sahu)
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