Nestlé S.A. has agreed to sell its regional spring water brands, purified water business and beverage delivery service in the US and Canada to One Rock Capital Partners in partnership with Metropoulos & Co for US$4.3 billion. Nestlé wants to tap into consumer trends such as functional water while focusing on international premium brands, local natural mineral waters and high-quality healthy hydration products.
The company’s international premium brands including Perrier, S.Pellegrino and Acqua Panna, are not a part of the deal.
The sale includes the following brands in the US and Canada, which had sales of around CHF 3.4 billion (US$3.8 billion) in 2019: Poland Spring, Brand 100% Natural Spring Water, Deer Park Brand 100% Natural Spring Water, Ozarka Brand 100% Natural Spring Water, Ice Mountain Brand 100% Natural Spring Water, Zephyrhills Brand 100% Natural Spring Water, Arrowhead Brand Mountain Spring Water, Pure Life and Splash.
The sale also comprises the US direct-to-consumer and office beverage delivery service ReadyRefresh.
Repositioning global waters business
The agreement follows Nestlé’s announcement last year that it would conduct a strategic review of parts of the North American waters division and sharpen the focus of its global water portfolio.
“We continue to transform our global waters business to best position it for long-term profitable growth,” says Mark Schneider, Nestlé CEO.
This sale enables us to create a more focused business around our international premium brands, local natural mineral waters and high-quality healthy hydration products. We will also boost our innovation and business development efforts to capture emerging consumer trends, such as functional water.”
Nestlé reiterated its commitment to making its entire water portfolio carbon neutral by 2025.
Last year, Nestlé announced renewed sustainability commitments, which build on existing efforts to enhance water stewardship and tackle plastic waste.
The transaction is expected to close following the completion of customary closing conditions, at which time Dean Metropoulos will become the company’s chairman and interim CEO.
Iconic brands
“Nestlé Waters North America’s iconic brands have earned the trust and preference of consumers everywhere due to an uncompromising commitment to quality. We are excited to further this commitment and build upon the market leadership of the business,” says Tony W. Lee, managing partner of One Rock.
The agreed sale of the North American water business to One Rock closely follows Nestlé boosting its plant-based portfolio with the launch of the first vegan KitKat, called KitKat V, due to be rolled out later this year.
