Nestle Agrees to Sell Water Unit Stake as Coffee Leads Growth

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July 23, 2026 - 08:37

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(Bloomberg) — Nestle SA is selling half of its water business for €3 billion ($3.4 billion) in cash and reported robust first-half coffee and snack sales as Chief Executive Officer Philipp Navratil presses ahead with a turnaround of the Swiss foodmaker.Nestle is selling the stake in the unit, which houses brands including Perrier and S.Pellegrino, to Platinum Equity, a private equity group, according to a statement Thursday. The deal will create a 50-50 joint venture called Peranel with an enterprise value of €4.9 billion, they said.Separately, the maker of Nespresso capsules and KitKat candy bars reported organic sales rose 3.6% in the first half, ahead of the 3.5% expected by analysts.Less than a year into his tenure, Navratil is under pressure to show Nestle can sustainably boost sales volumes, while simultaneously slashing costs and shedding underperforming businesses. Real internal growth, a key metric of volumes, was 1.5% in the first half, while pricing increased 2.1%.Nescafe LeadsThe coffee business recorded organic sales growth of 7.5% in the period, led by Nescafe, while growth in food and snacks was driven by brands including Maggi and KitKat.Nestle shares have climbed 9.4% so far this year and about 11% in the past 12 months, outpacing rival Unilever Plc, which has declined 3.3% since last July.Nestle is selling the water stake as part of a turnaround plan that’s aimed at refocusing on core brands. The company in April announced the sale of its Blue Bottle Coffee chain, and is also looking to sell its struggling vitamin unit and its remaining ice cream business.Nestle’s water operations have been troubled in recent years, hurt by tepid consumer demand and investigations and lawsuits related to the use of filtration and treatment methods on some bottled water products.Platinum, the California-based private equity firm backed by billionaire Tom Gores, outlasted other suitors in pursuing the business, confirming a Bloomberg report.Formula ImpactNavratil took over last September after his predecessor was ousted over an undisclosed romantic relationship with a subordinate. Nestle’s new chairman Pablo Isla took over on Oct. 1.The new leadership team has to prove it can revive growth while rebuilding trust after the governance crisis. Only months into their tenure they had to pull infant formula from shelves in more than 60 countries after finding a toxin in some products.The nutrition unit posted a decline in organic growth in the first half as the formula recall reduced sales by about 0.9 percentage point in the first quarter and 0.3 percentage point in the second, Nestle said. The company expects to regain market share by the end of the year.Nestle said the business in greater China has stabilized, a year after the company took steps to reduce trade inventories and revamp its operating model there.–With assistance from Lisa Pham.(Renoses and adds information on earnings from first paragraph)©2026 Bloomberg L.P.