Wednesday 17th February 2021
Premium brands remain in the group
Nestlé sells parts of the water business
The Swiss company Nestlé continues to rearrange its portfolio. The water division in North America changes hands for more than four billion dollars. One analyst speaks of an attractive deal.
The food giant Nestle is pushing the restructuring of the business with another billion dollar deal. The Swiss company is selling its North American water business for 4.3 billion dollars to the US financial investor One Rock Capital, which is working with Metropoulos, which specializes in the consumer goods industry, as Nestle announced. The transaction includes local brands such as Poland Spring or Pure Life as well as the US beverage delivery service ReadyRefresh for direct shipment to end consumers.
The international premium brands Perrier, S.Pellegrino and Acqua Panna, however, will remain with Nestle. "We are continuing to transform our global water business and aligning it with long-term, profitable growth," said CEO Mark Schneider, who has completed dozens of transactions since he took office in 2017.
Nestle sold off ailing areas such as the US ice cream business or the Yinlu business with peanut milk and canned rice porridge in China. In return, the company from Vevey on Lake Geneva expanded the coffee and medical nutrition sectors with acquisitions. Schneider wants to boost the growth of the group known for brands like Nescafe or KitKat.
The North American water business generated sales of CHF 3.4 billion in 2019. Vontobel analyst Jean-Philippe Bertschy estimates that this was likely to have shrunk to around 2.8 billion francs last year because out-of-home consumption collapsed during the Corona crisis and the dollar lost value against the franc. He classified the selling price for the business as "extremely attractive". "Nestle's portfolio management is near impeccable," said the analyst. For the period from 2018 to 2021, he expects acquisitions and sales worth a total of 40 billion francs. Nestle, which has a market value of around CHF 290 billion, presented its annual financial statements on Thursday.
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