PepsiCo to buy SodaStream for $3.2bn

Drinks giant PepsiCo has agreed to buy Israeli at-home carbonated drinks maker SodaStream for $3.2bn.

Under the terms of the agreement, PepsiCo will buy all outstanding shares of SodaStream for $144 per share in cash, which represents a 32% premium to the 30-day volume weighted average price.

The transaction, which will be funded with PepsiCo's cash on hand, has been unanimously approved by the boards of directors of both companies. It is subject to a SodaStream shareholder vote, certain regulatory approvals and other customary conditions, and is expected to close by January 2019.

PepsiCo chairman and chief executive officer Indra Nooyi said: "PepsiCo and SodaStream are an inspired match. 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.”

SodaStream CEO and director Daniel Birnbaum said: "Today marks an important milestone in the SodaStream journey. It is validation of our mission to bring healthy, convenient and environmentally friendly beverage solutions to consumers around the world. We are honoured to be chosen as PepsiCo's beachhead for at home preparation to empower consumers around the world with additional choices. I am excited our team will have access to PepsiCo's vast capabilities and resources to take us to the next level. This is great news for our consumers, employees and retail partners worldwide."

CMC Markets analyst Michael Hewson said: "In an age where governments are implementing new taxes on high sugar drinks, it would appear that Pepsico is taking the opportunity to diversify its product line as well as targeting new markets at a time when consumers are becoming more health conscious and creating their own carbonated drinks."

RBC Capital Markets said the acquisition could help PepsiCo beef up its revenue base before it offloads its US bottling assets.

In addition, it said SodaStream further diversifies PepsiCo’s business away from its traditional carbonated soft drinks brand portfolio, which could be a positive for Coca-Cola’s CSD brands.

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