PAI Partners Exits Bidding for Nestle Water Unit With Perrier and S.Pellegrino

Q: What scared Nestle's long-time partner away from buying iconic water brands like Perrier and S.Pellegrino?

PAI Partners appears to have been deterred less by the brands themselves than by the risks around the deal and the sector. The available reporting does not cite a single stated reason for PAI’s withdrawal. But the backdrop points to a tougher private-equity environment in 2026: higher interest rates, more difficult financing, valuation gaps between buyers and sellers, and investors showing less appetite for risk. That makes a roughly €5 billion valuation for Nestlé’s water business harder to justify and finance. There are also business-specific concerns around bottled water. Nestlé has been trying to exit the unit as part of a broader portfolio reset, and reporting around the process has highlighted regulatory demands and environmental concerns tied to water bottling. Bottled water businesses also face pressure from packaging taxes, “polluter pays” rules, and broader scrutiny of plastic use and water extraction. Those issues can weigh on future margins and increase reputational and compliance risk for a buyout firm. So while Perrier and S.Pellegrino remain strong global brands, what likely scared off Nestlé’s longtime partner was the combination of expensive financing, a demanding price, and rising regulatory and environmental risk around the bottled-water sector. In short, the asset may have looked iconic, but the deal economics and risk profile appear to have become less attractive.

2 articles · Updated · Bloomberg · Jun 8

PAI Partners has dropped out of the sale process for Nestle’s water business, ending its pursuit of a stake in the unit that includes Perrier and S.Pellegrino.
The withdrawal removes what had been seen as a leading contender, given PAI’s long-standing relationship with Nestle and their jointly owned ice cream venture.
The exit narrows the field in Nestle’s effort to reshape its water portfolio, with the auction now proceeding without one of the best-connected private equity bidders.