Nestlé is moving forward with plans to sell a stake in its bottled water division, setting up one of the food and beverage industry’s most closely watched carve-outs as private equity firms line up to back a business housing premium brands such as Perrier and S.Pellegrino, Bloomberg reported.

The Swiss food group has invited first-round bids this month for the water unit, valued at around €5 billion, according to sources, with Rothschild advising on the transaction.

The sale would mark a major step in Nestlé’s broader effort to refocus its portfolio and restore confidence following a turbulent period marked by regulatory scrutiny and reputational challenges.

Buyout firms including PAI Partners, Blackstone, KKR, Bain Capital and Clayton Dubilier & Rice have expressed interest, Bloomberg previously reported. Banks are preparing between €2 billion and €3 billion of debt financing to support a potential deal, structured as leveraged loans in euros and dollars, the sources said.

The financing would equate to roughly four to six times the unit’s estimated €500 million in earnings before interest, tax, depreciation and amortisation – a level that underscores both the strength of the underlying brands and the willingness of private equity to lean into consumer staples assets as dealmaking rebounds.

Nestlé announced in late 2024 that it would separate its water business, long viewed by investors as a non-core asset relative to its faster-growing nutrition, health and premium food categories.

Momentum around the sale has picked up following a leadership reset that saw Philipp Navratil appointed chief executive in September.

The deal highlights how even globally recognised beverage brands are being reassessed amid rising environmental and regulatory pressures. Bottled water producers face intensifying scrutiny over plastic use, water sourcing and sustainability claims – risks that investors are factoring into valuations.

Nestlé’s water division has also been under pressure after the company acknowledged in 2024 that it had used filtration methods not permitted for natural mineral waters in parts of its portfolio, while the group continues to manage a separate infant formula contamination crisis.

Despite those challenges, bankers involved in the process say the water unit remains an attractive asset, anchored by premium brands with global distribution and pricing power.