Friday 16 October 2020 6:57 am

Nestle sets $5bn water brand sale in motion

Food and drink giant Nestle is set to sell its North American water brands – which could go for around $5bn (£3.9bn) – as it moves away from lower-growth businesses.

Private equity funds including Apollo are expected to show an interest, according to Reuters, which cited numerous sources.

Read more: Hovis receives takeover offer from Italian firm Newlat Food

Wall Street titan Morgan Stanley is running the sale of the unwanted businesses. They include Pure Life, Poland Spring, Deer Park, Ozarka, Ice Mountain, Zephyrhills and Arrowhead.

It comes as Nestle boss Mark Schneider shifts the focus of the world’s largest food-maker towards higher earning brands. 

Reuters said Schneider is looking to keep hold of stronger brands like Perrier, San Pellegrino, and Acqua Panna.

Nestle declined to comment. Apollo and Morgan Stanley have been contacted for comment.

Schneider has been an active chief executive since taking over in 2017, having bought and sold around 50 businesses.

The water businesses up for sale have core earnings of about $600m. But analysts say they are declining slightly in value thanks in part to competition.

Nestle beat analysts’ expectations during the first half of the year. Its sales growth was helped by people buying more pet-food and groceries online as they stayed at home due to coronavirus.