PepsiCo buying SodaStream for $3.2 billion in cash

Daniel Fowler
August 21, 2018

That's 11% higher than Friday's closing price and would be PepsiCo's largest acquisition in eight years.

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.

SodaStream markets itself as a health-conscious maker of alternatives to cola drinks and PepsiCo's purchase is in line with the company's ongoing pivot of recent years towards drinks and snacks not as associated with the kind of mass sugar content as the Pepsi drink previously has been. The move is widely seen as an effort by Pepsi to prop up its catalogue of "healthy" food and drink options as it continues to wage battle against longtime rival Coca-Cola. SodaStream sells machines used with compatible carbon dioxide capsules and optional flavoured syrups, and its success in locking in customers allowed it to recently raise its full-year outlook.

Earlier this month, SodaStream reported its strongest results in company history, a 31 per cent year-over-year jump in revenues to $172 million United States, an 89 per cent leap in operating profit to $32 million and an 82 per cent climb by net profit to $26 million US.

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Ramon Laguarta, who will take over from Nooyi as PepsiCo boss later this year, said: "SodaStream is highly complementary and incremental to our business, adding to our growing water portfolio, while catalyzing our ability to offer personalized in-home beverage solutions around the world". The company has targeted big soda makers in ads in the past, criticizing them for making excessive waste.

Speculation about Pepsi or Coca-Cola buying SodaStream has bubbled for years. Along with water company Aquafina, it now owns LIFEWTR (pH balanced water with added electrolytes) and Bubly (a sparkling water brand).

SodaStream was set up in Britain in 1903 by a London gin distiller, and the company still had a factory in Peterborough as late as 2003, when production transferred to Israel and the West Bank under its new Israeli owners.

Goldman Sachs acted as financial advisor to PepsiCo and Centerview also acted as financial advisor to PepsiCo.

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