PepsiCo to buy Israel’s SodaStream for $3.2 billion
- Author: Eleanor Harrison Aug 21, 2018,
Aug 21, 2018, 0:30
Over the years, many users have used Sodastream only for making fizzy water, without the flavored syrups it sells.
"SodaStream is highly complementary and incremental to our business, adding to our growing water portfolio, while catalyzing our ability to offer personalized in-home beverage solutions around the world", Pepsi's incoming CEO Ramon Laguarta said in a statement.
"From breakthrough innovations like Drinkfinity to beverage dispensing technologies like Spire for foodservice and Aquafina water stations for workplaces and colleges, PepsiCo is finding new ways to reach consumers beyond the bottle, and today's announcement is fully in line with that strategy".
In second-quarter results issued earlier in August, SodaStream's revenue grew 31 percent, driven by growth in Germany, France, Canada and the United States, while net profit rose almost 82 percent. But the notion of creating soft drinks at home has had limited success. The company's fizzy drink maker was a hot item in Britain in the 1970s and 80s, Reuters writes, "but its popularity faded as bottled sodas became cheaper". 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.
The SodaStream acquisition will probably be the last big move by PepsiCo chief executive officer Indra Nooyi who steps down in October. Investors have speculated the snack maker was pursuing SodaStream for several years.
Actress Scarlett Johansson was previously a brand ambassador for the company.
However, Sodastream has commanded some negative headlines in recent years as well, due to the fact that its primary manufacturing plant was for years located in the West Bank, much to the annoyance of pro-Palestinian activists who dispute Israeli control of the territory.
The move will bring Israeli-based SodaStream International Ltd. under American ownership, and give PepsiCo more points for moving to decrease the amount of plastic flowing into landfills and seas.