PepsiCo buys fizzy drink maker SodaStream for $3.2bn

Palestinians work at a Soda Stream factory in the Mishor Adumim industrial park next to the Ma'ale Adumim

Palestinians work at a Soda Stream factory in the Mishor Adumim industrial park next to the Ma'ale Adumim

SodaStream shares were up more 9.7 per cent in mid-morning trading in NY at US$142.46, while PepsiCo was unchanged at US$115.01.

It is also the company's first big acquisition since chief executive Indra Nooyi disclosed she would step down in October after 12 years at the helm.

Speculation about PepsiCo or Coca-Cola buying Sodastream has bubbled for years.

This represents a 32% premium to the 30-day volume weighted average price.

Beverage giant PepsiCo on Monday purchased Israel's fizzy drink maker SodaStream for $3.2 billion United States, a boon for a company that has enjoyed a resurgence after being targeted by anti-Israel boycotters in the past.

Adam Epstein, co-founder of Teleios Capital, a top-10 SodaStream shareholder, said the company's focus on its core product and disciplined approach had started to pay off in recent quarters with "a rapidly growing installed base of loyal users and transformational improvement in operating performance".

Over her tenure, Nooyi split PepsiCo's products into three categories: Fun For You includes traditional, higher-calorie soft drinks and snacks. The transaction will be funded with PepsiCo's cash on hand.

Nooyi said SodaStream is an extraordinary company offering consumers the ability to make great-tasting beverages while reducing the amount of waste.

She said SodaStream's products, which are marketed as a healthy alternative to sugary drinks, fit in with the U.S. firm's goal of "making more nutritious products while limiting our environmental footprint".

"Together, we can advance our shared vision of a healthier, more-sustainable planet", Nooyi said.

"I am excited our team will have access to PepsiCo's vast capabilities and resources to take us to the next level".

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

Pepsi and Israeli-based company SodaStream already have an existing relationship, with Pepsi previously selling its cola on the platform in what the company called a "learning opportunity".

SodaStream is available at more than 80,000 individual retail stores across 45 countries.

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