PAI Partners and Bain Capital, along with Clayton Dubilier & Rice and KKR & Co., are considering making bids for Nestle SA’s water business, which could potentially be valued at around €5 billion ($5.4 billion) or more. Sources familiar with the matter revealed that Nestle may still retain a stake in the unit post any deal. Nestle is reportedly preparing to engage investment banks to explore options for its water business soon.

The decision-making process is still ongoing, and there is no guarantee that a deal will be finalized, the sources cautioned. When approached for comments, representatives for Nestle, Bain, CD&R, KKR, and PAI refrained from responding.

Nestle's CEO, Laurent Freixe, had previously announced intentions to separate the water business, which includes renowned brands like Perrier, S.Pellegrino, and Acqua Panna, given its stagnant growth in recent quarters. Management plans to review the strategic direction, including possible partnerships. Despite facing issues such as contamination and supply challenges in recent times, the water business contributes less than 4% to Nestle’s overall revenue.

PAI and Nestle have been involved in successful joint ventures for their ice cream and frozen pizza businesses. Froneri, established in 2016 from a merger between Nestle's European ice cream division and PAI-owned R&R Ice Cream, manages brands like Haagen-Dazs. In 2019, Nestle sold its US ice cream business to Froneri for $4 billion. Subsequently, they formed a joint venture for Nestle’s frozen pizza business in Europe.

This information was provided with the assistance of Sonja Wind.