PepsiCo buys SodaStream for $3.2B

21 August, 2018, 11:56 | Author: Shannon Aguilar
  • Scarlett Johansson with Sodastream’s Daniel Birnbaum

Beverages from PepsiCo ranges from sodas, iced tea and bottled water. "PepsiCo is finding new ways to reach consumers beyond the bottle".

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.

Monday's sale looks to inject another big tax payout to Israel following previous sales of Israeli companies such as the mobile navigation app Waze, which was acquired by Google for about $1 billion, and Mobileye, which produces technology for self-driving cars and was gobbled up by Intel past year for $15 billion.

SodaStream makes a kitchen gadget that allows people to carbonate any drink in their home.

SodaStream's shares were up 9 percent in Tel Aviv, while its US -listed shares were up almost 10 percent. The PepsiCo CEO, Ramon Laguarta, claims that he thinks the company will remain in Israel "forever" because "the infrastructure is so powerful".

Shares of SodaStream surged almost 10 percent Monday, while PepsiCo's stock rose slightly.

Actress Scarlett Johansson was previously a brand ambassador for the company.

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Matthew Barry, senior analyst of beverages at Euromonitor International, said deals like the SodaStream purchase were vital for PepsiCo as it passes to new management.

PepsiCo will pay $144 per share in cash, representing a 10.9 percent premium to Friday's closing price of SodaStream's US -listed stock and a 32 percent premium to its 30-day average.

Laguarta said PepsiCo had held talks with SodaStream several times in the past but wanted to make sure its business was solid before doing a deal.

Sales of soft drinks, PepsiCo's traditional products, are struggling.

Adam Epstein, co-founder of Teleios, which is the fourth-largest shareholder in SodaStream, said the deal "represents an excellent outcome for all shareholders".

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

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