Swiss food giant Nestle announced Thursday that it plans to raise approximately €3 billion — roughly $3.43 billion — by spinning off its water division into a new company formed as an equal partnership with U.S.-based investment firm Platinum Equity.
The newly created venture will go by the name Peranel and will house several well-recognized premium water labels, including Source Perrier, S.Pellegrino, and Acqua Panna, along with the Nestle Pure Life brand and various regional water operations.
Nestle placed an enterprise value of €4.9 billion on Peranel as part of the agreement, with the Swiss food company expecting to receive cash proceeds of around €3.0 billion once the transaction closes. That closing is anticipated to happen sometime in the first half of next year.
The move comes after Nestle’s water business has faced significant legal and regulatory troubles in France related to unauthorized water treatment practices, as well as growing criticism from environmental groups over water usage and sustainability issues.
CEO Philipp Navratil has been working to sharpen the company’s focus on its core product lines — which include infant formula, coffee, and pet food — in an effort to boost growth and profitability. Nestle also released its first-half financial results on Thursday.
“By partnering with Platinum Equity, Peranel will be better positioned to execute its strategy with enhanced agility,” Navratil said in a prepared statement.
