PepsiCo to buy Israel’s SodaStream for $3.2 billion
Beverage and snack giant PepsiCo announced plans Monday to acquire at-home carbonated drink maker Israel’s SodaStream for $3.2 billion.
New York-based PepsiCo 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.
With this move, PepsiCo is doubling down on its drinks business, which has struggled in North America as consumers move away from sugary, carbonated beverages. It also seemingly addresses the challenge that buying new drink brands risks cannibalizing its legacy beverages.
Israel-based SodaStream makes a machine and refillable cylinders through which users can make their own soda or carbonated water drinks.
For SodaStream, the deal is a further chance to broaden its reach through PepsiCo’s global footprint. It now distributes in 80,000 individual retail stores across 45 countries. Its biggest markets are Germany, France, Canada and the U.S.
“We’ve been on and off talking to [SodaStream CEO Daniel Birnbaum] for a couple of years, not just on acquiring them,” said Johnston. “He got convinced the cultural fit would be good.”
The deal came together in a “matter of weeks,” Johnston said. Birnbaum will remain with the company when the deal closes.
In 2015, SodaStream was forced to move from Mishor Adumim to the Negev for financial reasons, following anti-Israel Boycott, Divestment and Sanctions (BDS) campaigns.
The factory was a model of integration, employing 500 residents of the Palestinian Authority, 450 Arab Israelis and 350 Israeli Jews on the same salaries and with the same social security benefits.
PA employees received salaries four or five times that of the average wage in the territories controlled by the Palestinian Authority.