PepsiCo buys Israel’s SodaStream for Whopping $3.2 billion

The deal with SodaStream gives PepsiCo a new market share where it can now reach customers in their homes, not in the store shelves

American Beverage and snack giant PepsiCo said on Monday it plans to acquire Israeli at-home carbonated drink-maker SodaStream for $3.2 billion.

The company agreed to pay $144 per share in cash for SodaStream’s outstanding stock, a 32 percent premium to its 30-day volume weighted average price.

SodaStream is the leading sparkling water brand in the world. It makes a machine and refillable cylinders through which customers can make their own soda drinks at home.

On Aug 1 SodaStream reported its strongest results in the company’s history, CEO Daniel Barinboim said. The Tel Aviv based company reported a 31% year-over-year growth in revenues to $172 million, an 89% jump in operating profit to $32 million and an 82% rise by net profit to $26 million.

Barinboim said at the time, “SodaStream is a great alternative to single-use plastic bottles which are being revealed as a hazard not only to the environment but also to human health.”

Wall Street research site Zacks  last week gave SodaStream a Strong Buy recommendation, writing, “SodaStream reported its second quarter results and simply hit the ball out of the park. Earnings were $1.14 versus the Zacks Consensus of $0.71…. It was the 12th consecutive beat in a row.”

SodaStream is one the Israeli companies suffered of the boycott, sanctions and divest movement (BDS) as it had formerly been based in Ma’aleh Adumim, a West Bank town.

Jewish actress Scarlett Johansson, who pitch for SodaStream at the Super Bowl in 2014, subsequently came under fire from BDS.

Under business pressures SodaStream two years ago laid off all of its Palestinian employees and moved its manufacturing operations to a Bedouin town Rahat, in southern Israel.

SodaStream closes West Bank factory to move to Israel

“PepsiCo and SodaStream are an inspired match,” declared PepsiCo Chairman and CEO Indra Nooyi. “Daniel and his leadership team have built an extraordinary company that is offering consumers the ability to make great-tasting beverages while reducing the amount of waste generated. That focus is well-aligned with Performance with Purpose, our philosophy of making more nutritious products while limiting our environmental footprint. Together, we can advance our shared vision of a healthier, more-sustainable planet.”

“PepsiCo is finding new ways to reach consumers beyond the bottle,” said Ramon Laguarta, CEO-Elect, and President, PepsiCo.

SodaStream gives PepsiCo a new market share where it can now reach customers in their homes, not in the store shelves. According to the Food Marketing Institute and Nielsen 70 percent of customers expected to buy groceries online by 2025.

PepsiCo struggles in the U.S and Canada as consumers move away from sugary, carbonated beverages. Combining PepsiCo’s distribution capabilities, R&D, design, and marketing expertise, with SodaStream’s differentiated product range, will position both companies for further expansion.




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