Paris Water is going to be sold

AI question · Why did Nestlé choose to sell Paris Water after 34 years of ownership?

If you have ever ordered a bottle of Paris Water at a fine-dining restaurant, the waiter would place that iconic teardrop-shaped green bottle in front of you, gently set down on your table using a white napkin. At that moment, you are not just drinking water—you are tasting the limestone formations of the Gard region in southern France, a 160-year brand legacy, and the poster aesthetics personally illustrated by Dali and Andy Warhol. Paris Water, the French sparkling mineral water known as the “champagne of water,” has long been one of Nestlé’s proudest assets among the world’s largest food and beverage companies.

However, in early 2026, it was hung with a “for sale” sign.

According to the British Financial Times, Nestlé’s plans to spin off its European bottled water business have recently gained traction. Several private equity firms, including KKR, PAI Partners, and Dubilier & Rice, have entered the bidding process. The report said Nestlé values this business segment at around 5 billion euros (about 39.6 billion yuan), covering multiple premium bottled water brands such as Paris Water, San Pellegrino, and Perrier.

Nestlé once owned the world’s largest and most diverse “bottled water empire.” But after the deal to sell its European bottled water business is completed, Nestlé will only keep operations of some water brands in emerging markets such as Africa and Southeast Asia—almost entirely exiting the bottled water market.

Nestlé’s “water empire,” from rise to fall

34 years ago, Nestlé paid a tremendous price to acquire Paris Water.

In 1990, Paris Water—already holding half of the global carbonated mineral water market—suddenly ran into a crisis. During production, trace benzene residues were discovered, forcing a worldwide recall of 160 million bottles. The incident not only caused direct profit losses running into hundreds of millions of dollars, but it also severely damaged Paris Water’s brand image, with its market share being dramatically eaten away by its main competitor, Evian.

So when Nestlé, then with ambitious plans to expand its bottled water business, saw an opportunity. At that time, Nestlé already had some bottled water brands, but they were not yet formidable. As is well known, Nestlé has a famous strategy: “to secure leadership or the number-two position in every segment.” To achieve that goal quickly, buying Paris Water—one of the most highly reputed brands—was the best choice.

Nestlé therefore launched a hostile takeover of Paris Water. The takeover war later kept escalating. It first turned into a fierce standoff with Italy’s Agnelli family, and then it triggered an EU antitrust investigation. In the end, Nestlé compensated the Agnelli family with a hefty cash payment, along with assets including Bordeaux’s Châteaux Margaux winery, the Roquefort cheese company, and some core Paris real estate, persuading the Agnelli family to withdraw. Nestlé then also agreed to sell eight smaller mineral water brands under its umbrella to independent third parties, in exchange for EU approval of the acquisition.

Ultimately, Nestlé successfully acquired Paris Water for a high price of 15.3 billion francs. And those costs were worth it. After taking Paris Water, Nestlé leapt to become the global leader in the high-end water market. Afterwards, Nestlé went on to acquire San Pellegrino and Perrier in succession, gradually expanding its presence in the high-end water market to more than 140 countries.

By the early 2000s, Nestlé had built the world’s largest and most diverse “water empire,” forming a massive multi-layered matrix spanning international premium brands, global mainstream brands, and regional strongholds. In addition to Europe’s premium line, Nestlé also owned mass-market brands such as Poland Spring and Deer Park in North America, and it had positioned local brands in China including Nestlé Pure Life, Dashan, and Yunnan Mountain Spring. One bottle of Nestlé water—from naturally sparkling mineral water in France to mountain spring water in Yunnan—could be found across the portfolio, covering everything.

However, 20 years later, Nestlé dismantled this vast “water empire” by its own hands.

In 2020, Nestlé packaged and sold its China drinking water business—including Yunnan Dashan and Yunnan Mountain Spring—to Tsingtao Brewery. Looking back, this was a prelude to the empire’s contraction.

In February 2021, Nestlé made a historic decision: for $4.3 billion, it sold its North American regional spring water brands, purified water business, and water delivery services to the private equity institutions One Rock Capital Partners and Metropoulos & Co. In this transaction, Nestlé divested a series of mass-market brands, including Poland Spring, Zephyrhills, and Arrowhead. The reason given at the time was that it wanted to exit low-margin, high-capital-expenditure basic water businesses and “tilt all resources toward irreplaceable premium brands such as Paris Water, San Pellegrino, and Perrier.”

Yet only three years later, Nestlé began planning to sell Paris Water. In November 2024, Nestlé announced a major organizational restructuring, consolidating its “water and premium beverages business” into an independently operated business unit, with the goal of spinning off the water business in preparation for the sale of assets.

Sure enough, in early 2026, Nestlé formally launched a first round of tenders to the market for the sale of its European water business. Under Nestlé’s plan, starting in 2027, Paris Water, San Pellegrino, and Perrier would be separated from Nestlé’s financial statements—but Nestlé would not fully exit. Instead, while retaining certain equity, it would introduce private equity firms to co-operate these brands. This is exactly the same approach Nestlé used previously to deal with its ice cream business: by bringing in private equity, it set up a joint venture, Froneri, under which the brand portfolio was placed, while Nestlé kept minority equity, shared risk, and collected long-term returns. This model has become the standard way for Nestlé to handle non-core assets.

Why doesn’t Nestlé want to sell water anymore?

In 2024, French media exposed a startling matter: Nestlé carried out “illegal treatment” of water sources at its water plants in France, including those tied to Paris Water. Under EU regulations, products labeled as “natural mineral water” are explicitly prohibited from being cleaned using industrial methods such as ultraviolet disinfection or activated carbon filtration—but Nestlé did exactly that.

After the story was exposed, Nestlé’s response was that “all natural mineral water products have always met drinking safety standards.” But such self-justification was clearly weak. When consumers pay 12 yuan for a bottle of Paris Water, they are not only paying for the water itself—they are paying for belief in that century-old story: pure spring water naturally combined with volcanic carbon dioxide from deep underground in the Gard region of France. Consumer rights organizations have already brought multiple lawsuits against Nestlé, demanding that Paris Water products be banned from using the “natural mineral water” label.

Just like the scandal in 1990, the biggest impact of this incident on Paris Water was not direct economic loss, but a blow to brand value. What’s more, this incident also reflects the bigger dilemma that premium water faces today: the conflict between high regulatory compliance costs and growth bottlenecks.

In the 2024 fiscal year when the scandal broke, Nestlé’s water business segment recorded an organic growth rate of 2.3%, and its internal actual growth rate was even -1.0%. In fiscal 2025, the organic growth rate of Nestlé’s water business rebounded to 2.9%, but it still lagged behind the group average. Not only was the growth rate slow, but profit margins were also not high. In 2025, the operating profit margin was only 5.6%, again far below the group average.

In short, judging by financial performance, today’s premium water business has become an asset characterized by “low growth, high risk, and low returns.” In September 2025, Nestlé’s newly appointed CEO, Nefzati, proposed that the strategic focus be defined around four core pillars: coffee, pet food, nutrition and health sciences, and food and snacks. The water business does not fall within these four pillars.

In fact, Nestlé selling Paris Water is only a small part of this larger “elephant turning around.”

As the world’s largest food and beverage company, Nestlé’s product line covers nearly all dietary categories, from coffee to infant formula. But now it is becoming increasingly difficult for Nestlé to “secure leadership or the number-two position in every segment,” and growth is losing momentum. Financial reports show that in fiscal 2025, Nestlé’s organic growth rate was only 3.5%, and almost all of it came from pricing growth contributions, with internal real growth of just 0.8%.

After Nefzati took over as CEO, he called out the slogan “no longer accept losing market share,” seeking to get this old corporate giant to regain its “wolfish” aggressiveness. He told the media that Nestlé has more than 2,000 brands, but 80% of profits come from fewer than 40 brands. This means that the vast majority of brands occupy large amounts of group resources and management effort, yet contribute only a tiny share of marginal profit.

Under Nefzati’s direction, Nestlé is carrying out a surgical-style pruning of its business. First, it announced it would cut 16,000 jobs by 2027, about 6% of its total global workforce. Then it openly acknowledged “18 underperforming units,” which account for about 21% of the group’s total sales and have long dragged down the group’s overall growth rate. The tone set by Nefzati is that if these businesses still cannot return to the industry-average growth rate by 2026 and deliver healthy profit margins, the group will launch a spinoff and disposal process without hesitation.

In other words, selling Paris Water is currently the most eye-catching cut in Nestlé’s self-revolution—but it will not be the last cut.

For Paris Water, a change of owner might not necessarily be a bad thing. Nestlé needs to concentrate resources on pillar products such as coffee, so its investment in the water business will be relatively limited. Bringing in well-capitalized private equity funds could help release even more value from the Paris Water brand.

And for capital, the attractiveness of the asset package comprising Paris Water, San Pellegrino, and Perrier is obvious. Despite growth bottlenecks, they are still scarce assets with reliable cash flow and strong brand “moats.” It was reported that Nestlé’s water business generated about 500 million euros of EBITDA in 2025—meaning the transaction’s valuation is roughly 10 times EBITDA, which is relatively high in today’s M&A market conditions.