PepsiCo buys fizzy drinks maker SodaStream for $3.2bn

PepsiCo buys fizzy drinks maker SodaStream for $3.2bn

Founded in the United Kingdom in 1903, SodaStream was a coveted device in British kitchens in the 1970s and 80s, allowing customers to create fizzy drinks by adding flavoured syrups to carbonated water, but it faded in popularity as soft drinks became cheaper.

"With sugary carbonates and juices struggling and no turnaround in sight, mitigating the losses through newer and healthier products will be essential for PepsiCo", he said in a research note. The $3.2 billion purchase price means Pepsi will pay $144 per SodaStream share-a 32% premium over its 30-day volume-weighted average price.

In 12 years as CEO, Nooyi sought to expand the company's offering of healthier food and drinks.

Israeli-based SodaStream listed on the NASDAQ in 2010.

"SodaStream is highly complementary and incremental to our business, adding to our growing water portfolio", said Ramon Laguarta, who is set to replace Nooyi in October.

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PepsiCo said the transaction, unanimously approved by the boards of both firms, was expected to close by January 2019.

The buyout offer is "validation of our mission to bring healthy, convenient and environmentally friendly beverage solutions to consumers around the world", Daniel Birnbaum, SodaStream chief executive said in a statement.

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% previous year up from 35% in 2016 according to data from industry tracker Beverage Marketing Corp".

He said the deal "represents an excellent outcome for all shareholders".

Earlier this month, SodaStream reported its strongest results in company history, a 31 per cent year-over-year jump in revenues to $172 million USA, an 89 per cent leap in operating profit to $32 million and an 82 per cent climb by net profit to $26 million US. The deal will give the brand access to PepsiCo's distribution capabilities, global reach, R&D, design and marketing expertise with the aim of fuelling expansion and innovation. SodaStream faced calls for a boycott several years ago over a factory it had in the West Bank, despite employing many Palestinians.

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