PepsiCo to buy Israel's SodaStream in US$3.2b deal

Lloyd Doyle
August 20, 2018

PepsiCo will buy carbonated drink-machine maker SodaStream for $3.2 billion as it battles Coca-Cola for an edge in the health-conscious beverage market.

PepsiCo Chairman and Chief Executive Indra Nooyi, who has announced plans to step down, called SodaStream an "extraordinary company that is offering consumers the ability to make great-tasting beverages while reducing the amount of waste generated".

Purchasing the Israeli company, known for DIY seltzer makers like the SodaStream Mix, will push Pepsi's image in a health-focused direction, according to CNN. She added that SodaStream is in line with the company's "philosophy of making more nutritious products while limiting our environmental footprint".

The deal is likely to close in January.

The acquisition has been unanimously approved by the Boards of Directors of both companies.

PepsiCo president Ramon Laguarta, who will succeed Ms Nooyi on 3 October, said in a statement that Sodastream was "highly complementary and incremental" to Pepsi's business. It is validation of our mission to bring healthy, convenient and environmentally-friendly beverage solutions to consumers around the world.

Sales of soft drinks, PepsiCo's traditional products, are struggling.

According to The Wall Street Journal, "Sparkling water has grown far more strongly than the overall bottled water category in the USA, clocking volume growth of 38% past year up from 35% in 2016 according to data from industry tracker Beverage Marketing Corp".

SodaStream was founded in 1903 by London Gin distiller W & A Gilbey.

SodaStream shares have jumped 49 per cent this month after the company boosted its forecast for revenue growth this year to 23 per cent and reported first-half figures that beat estimates.

PepsiCo said its global distribution network would help SodaStream expand further. SodaStream faced calls for a boycott several years ago over a factory it had in the West Bank, despite employing many Palestinians. Goldman Sachs and Centerview advised PepsiCo, while Perella Weinberg Partners gave advice to SodaStream.

Other reports by Iphone Fresh

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