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Nestle has 64 bottled-water brands globally. Most people are familiar with names like Pure Life, Perrier and San Pellegrino. However, regional brands rarely have any recognition outside the regions where they are popular. Nestle generates 80% of its bottled-water business from Europe and North America, two places where Pure Life is a leading seller. If a deal does happen, expect those regions to be the focus.
As for buyers of the three brands, James Targett, an analyst with Berenberg Bank, believes Coca-Cola (KO) is at the top of the list. Dr Pepper Snapple (DPS) doesn’t have a big water business, so it’s also a likely candidate. Just don’t expect to see private equity firms go after these brands. Margins here are half Nestle’s other divisions, and these brands lack the kind of strategic fit that the Jenny Craig deal had for PE firms.