PepsiCo puts fizz into healthy drinks with $3.2 billion SodaStream deal
Aug 21 2018
SodaStream shares jumped 9.4 per cent to close at US$142.11 in NY, while PepsiCo slipped 0.1 per cent to US$114.94.
PepsiCo will pay $144 per share in cash, representing a 10.9 percent premium to Friday's closing price of SodaStream's USA -listed stock and a 32 percent premium to its 30-day average.
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.
Over her tenure, Nooyi split PepsiCo's products into three categories: Fun For You includes traditional, higher-calorie soft drinks and snacks. The PepsiCo chief executive announced Monday that Pepsi is buying SodaStream, one of the world's top sparkling water brands.
The keys to Sodastream's business relies on selling flavour packs that allow consumers to add their own mixes to the carbonated water.
"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".
PepsiCo chief executive Indra Nooyi, who is stepping down following 12 years at the helm, the purchase of Tel Aviv-based SodaStream fit in with the USA company's sustainability push, which involves pledges on producing healthier goods, more efficient use of water and reducing waste.
"Together, we can advance our shared vision of a healthier, more sustainable planet", she added. "We are honoured to be chosen as PepsiCo's beachhead for at home preparation to empower consumers around the world with additional choices".
The deal between Pepsi and Sodastream still needs to clear cursory regulatory hurdles, but PepsiCo plans to pay $144 (£113) cash per SodaStream share in the transaction using cash on hand.
Goldman Sachs and Centerview advised PepsiCo, while Perella Weinberg Partners gave advice to SodaStream.
SodaStream is available at more than 80,000 individual retail stores across 45 countries.