Published: Mon, August 20, 2018
Money | By Ralph Mccoy

PepsiCo buys Israel's SodaStream for $3.2 billion

PepsiCo buys Israel's SodaStream for $3.2 billion

PepsiCo will acquire SodaStream for $144 per share in cash, representing a 10.9 percent premium to the Friday closing price of SodaStream's US -listed stock.

The parent of Plano-based Frito-Lay said Monday it plans to acquire make-your-own soft drink brand SodaStream in a deal valued at $3.2 billion.

The Purchase, New York-based company will pay $144 per share in cash for the firm that promises to help customers reduce their carbon footprints. "PepsiCo is finding new ways to reach consumers beyond the bottle".

PepsiCo chairman and CEO Indra Nooyi says: "PepsiCo and SodaStream are an inspired match".

Nooyi is stepping down from the top job at PepsiCo later this year, but the move shows that Pepsi's CEO-elect, Ramon Laguarta, will continue focusing on healthier alternatives.

Waning soda consumption and environmental concern have led soft-drink producers to try to tap the at-home market, though success has been elusive.

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Nooyi said SodaStream is an extraordinary company offering consumers the ability to make great-tasting beverages while reducing the amount of waste. As the stock declined in 2014 and 2015, Birnbaum began the marketing shift away from sugary sodas, and it worked: PepsiCo's bid price is 10 times where the shares were trading less than three years ago. Investors have speculated the snack maker was pursuing SodaStream for several years.

Keurig Green Mountain and Dr Pepper Snapple Group merged last month, creating a beverage company with annual revenue of US$11 billion.

Actress Scarlett Johansson was previously a brand ambassador for the company.

Buying SodaStream will further boost Pepsi's health credentials.

PepsiCo was advised by Goldman Sachs and Centerview, while SodaStream was advised by Perella Weinberg Partners.

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