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Buyout Firms Circle Nestle’s €5 Billion Water Business

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(Bloomberg) -- PAI Partners and Bain Capital are among buyout firms considering bids for Nestle SA’s water business, which could be valued at about €5 billion ($5.4 billion) or more in a deal, according to people familiar with the matter.

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Clayton Dubilier & Rice and KKR & Co. have also been studying the business, said the people, who asked not to be identified as the information is private. Nestle may retain a stake in the unit in any transaction, the people said. Nestle is likely to appoint investment banks to advise on options for the water business in the coming days, they said.

Deliberations are ongoing and may not result in a deal, according to the people. Representatives for Nestle, Bain, CD&R, KKR and PAI declined to comment.

Nestle Chief Executive Officer Laurent Freixe late last year announced plans to separate the water business, which includes brands such as Perrier, S.Pellegrino and Acqua Panna, after the unit’s organic growth has slowed in recent quarters. Management is set to evaluate its strategy, including partnership opportunities. The water business accounts for less than 4% of Nestle’s total revenue and has struggled of late from contamination issues and supply constraints.

PAI and Nestle have been running joint ventures for their ice cream and frozen pizza assets. Froneri, which holds brands like Haagen-Dazs, was created in 2016 when the Swiss company merged its European ice cream business with PAI-owned R&R Ice Cream. In 2019, Nestle sold its US ice cream operation to Froneri for $4 billion. Four years later, the duo established a joint venture for Nestle’s frozen pizza business in Europe.

--With assistance from Sonja Wind.

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