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PepsiCo has announced it is buying Sodastream for $3.2bn (£2.5bn).

Israel-based Sodastream makes a machine and refillable cylinders allowing users to make their own carbonated drinks.

The deal gives Pepsi a new way of reaching customers in their homes at a time when its signature sugary drinks are becoming less popular.

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.

PepsiCo will buy all outstanding shares of Sodastream for $144 each - almost 11% higher than its closing price in New York on Friday.

The stock has soared 85% this year after rising by 78% in 2017.

The takeover has already been approved by the boards of both firms.

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PepsiCo president Ramon Laguarta, who will succeed Ms Nooyi on 3 October, said Sodastream was "highly complementary and incremental" to Pepsi's business.

"PepsiCo is finding new ways to reach consumers beyond the bottle," he added.

Sodastream has repositioned itself as a sparkling water maker to appeal to younger consumers who are more health and environmentally conscious and increasingly shun soft drinks.

"With sugary carbonates and juices struggling and no turnaround in sight, mitigating the losses through newer and healthier products will be essential for PepsiCo," said Euromonitor International analyst Matthew Barry.

The market research firm says bottled water sales rose 6.2% annually in the five years to 2017, while carbonated soft drinks sales were flat.

If regulators approve the deal, it is expected to be finalised by January 2019, subject to a vote by Sodastream shareholders.

Sodastream was originally founded in the UK in 1903 and went through various changes of ownership until it became a subsidiary of Cadbury Schweppes in 1985.

In 1998, it was bought by Israeli firm Soda-Club, with its UK manufacturing plant in Peterborough closing in 2003.</s>PepsiCo Inc. agreed to buy SodaStream International Ltd. for US$3.2 billion in the latest attempt by a major soft-drink maker to harness demand for at-home drink systems to offset a slowdown in soda.

PepsiCo will pay US$144 a share in cash for the Israeli company, the companies said in a statement Monday. That’s 11 per cent higher than Friday’s closing price and would be PepsiCo’s largest acquisition in eight years. SodaStream shares rose 10 per cent to US$143.25 in premarket trading in the U.S.

Waning soda consumption and environmental concern have led soft-drink producers to try to tap the at-home market, though success has been elusive. Coca-Cola Co. ventured into the segment in 2014 when it bought a stake in Green Mountain Coffee Roasters, though the soft-drink-making system they developed was discontinued in 2016 due to weak demand. To counter the weakness in soft drinks in recent years, SodaStream Chief Executive Officer Daniel Birnbaum has shifted the company’s marketing to focus on how the machines can produce carbonated water.

The transaction values SodaStream at 36 times trailing 12-month operating profit, compared with a median of 21 times for comparable deals, according to data compiled by Bloomberg. The stock has jumped 49 per cent this month after second-quarter earnings exceeded the highest analyst estimates.

The purchase will probably be the last big move by PepsiCo CEO Indra Nooyi, who said this month she’s stepping down as head of the beverage company after 12 years in the job.

“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,” Nooyi said in the statement.

SodaStream sells machines that carbonate tap water. The company has targeted big soda makers in ads in the past, criticizing them for making excessive waste. After declines in 2014 and 2015, the stock has surged amid the company’s refocus on sparkling water, and the bid price is 10 times where the shares were trading less than three years ago.

“SodaStream is highly complementary and incremental to our business, adding to our growing water portfolio,” said Ramon Laguarta, who is set to replace Nooyi in October.

After Coca-Cola bought the stake in Green Mountain in 2014, Nooyi said in an interview PepsiCo would avoid committing to a single technology in at-home soda makers. Investors have speculated the snack maker was pursuing SodaStream for several years.

Keurig Green Mountain and Dr Pepper Snapple Group merged last month, creating a beverage company with annual revenue of US$11 billion. Last week, Coca-Cola agreed to buy a minority stake in Bodyarmor, a sports-drink maker whose backers include former basketball star Kobe Bryant, in a further move to diversify beyond sugary, fizzy beverages.

SodaStream has been the focus of controversy in the Middle East. Protesters claimed victory when the company closed a factory in the West Bank in 2014, which the opponents said was part of Israel’s illegal occupation of the territory. SodaStream has argued that boycotts and protests have hurt Palestinians more than helped them.

Goldman Sachs and Centerview advised PepsiCo, while Perella Weinberg Partners gave advice to SodaStream.</s>PepsiCo Inc. agreed to buy fizzy-drinks dispenser SodaStream International Ltd. for US$3.2 billion to extend the company synonymous with sugary sodas into the homes of more health-conscious consumers.

PepsiCo will pay US$144 a share in cash for the Israeli company, the companies said in a statement Monday. That’s 11 per cent higher than Friday’s closing price and would be the Purchase, New York-based company’s largest acquisition in eight years.

In one of her final acts as chief executive officer of PepsiCo, Indra Nooyi is betting on a razors-and-blades kind of business model to reanimate revenue growth that has been waning due to weak demand for traditional sugary soft drinks. 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. PepsiCo said the move is also intended to boost sustainability because consumers fill reusable bottles.

SodaStream shares have jumped 49 per cent this month after the company boosted its forecast for revenue growth this year to 23 per cent and reported first-half figures that beat estimates. The stock rose 10 per cent to US$143.36 in premarket trading in the U.S.

With soft-drink sales hurting in recent years as consumers shy away from sugary beverages, SodaStream Chief Executive Officer Daniel Birnbaum has shifted the company’s marketing to focus on how the machines can produce carbonated water, without the flavoured syrups.

Other soft-drink producers have tried to tap the at-home market, though success has been elusive. Coca-Cola Co. ventured into the segment in 2014 when it bought a stake in Green Mountain Coffee Roasters, though the soft-drink-making system they developed was discontinued in 2016 due to weak demand.

The purchase will probably be the last big move by Nooyi, who said this month she’s stepping down as head of the beverage company after 12 years in the job.

“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,” Nooyi said in the statement.

SodaStream has targeted big soda makers in ads in the past, criticizing them for making excessive waste. As the stock declined in 2014 and 2015, Birnbaum began the marketing shift away from sugary sodas, and it worked: PepsiCo’s bid price is 10 times where the shares were trading less than three years ago.

“SodaStream is highly complementary and incremental to our business, adding to our growing water portfolio,” said Ramon Laguarta, who is set to replace Nooyi in October.

After Coca-Cola bought the stake in Green Mountain in 2014, Nooyi said in an interview PepsiCo would avoid committing to a single technology in at-home soda makers. Investors have speculated the snack maker was pursuing SodaStream for several years. In 2014, PepsiCo tested sales of homemade brands through the Israeli company’s system.

Keurig Green Mountain and Dr Pepper Snapple Group merged last month, creating a beverage company with annual revenue of US$11 billion. Last week, Coca-Cola agreed to buy a minority stake in Bodyarmor, a sports-drink maker whose backers include former basketball star Kobe Bryant, in a further move to diversify beyond sugary, fizzy beverages.

SodaStream has been the focus of controversy in the Middle East. Protesters claimed victory when the company closed a factory in the West Bank in 2014, which the opponents said was part of Israel’s illegal occupation of the territory. SodaStream has argued that boycotts and protests have hurt Palestinians more than helped them.

The transaction values SodaStream at 36 times trailing 12-month operating profit, compared with a median of 21 times for comparable deals, according to data compiled by Bloomberg.

 Goldman Sachs and Centerview advised PepsiCo, while Perella Weinberg Partners gave advice to SodaStream.</s>NEW TORK: PepsiCo Inc said on Monday (Aug 20) it would buy Israel-based Sodastream, which makes fizzy drink-making household devices, in a deal valued at US$3.2 billion.

PepsiCo will acquire Sodastream for US$144 per share in cash, the companies said in a statement.</s>PepsiCo Inc agreed to buy SodaStream International Inc for US$3.2 billion, gaining the Israeli company's technology for making soft drinks at home amid rising concern about plastic waste.

[GENEVA] PepsiCo Inc agreed to buy SodaStream International Inc for US$3.2 billion, gaining the Israeli company's technology for making soft drinks at home amid rising concern about plastic waste.

PepsiCo will pay US$144 a share in cash, the companies said in a statement on Monday. That's 11 per cent higher than Friday's closing price and would be PepsiCo's largest acquisition in eight years. SodaStream shares were suspended in Tel Aviv on Monday morning.

Waning soda consumption and environmental concern have led soft-drink producers to try to tap the at-home market, though success has been elusive. Coca-Cola Co ventured into single-serve machines when it bought a stake in Green Mountain Coffee Roasters in 2014, though the soft-drink-making system they developed was discontinued in 2016 due to weak demand. SodaStream chief executive officer Daniel Birnbaum has shifted the Israeli company's focus from making at-home soft drinks to producing carbonated water.

The purchase will probably be the last big move by PepsiCo CEO Indra Nooyi, who said this month she's stepping down as head of the beverage company after 12 years in the job.

"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," Ms Nooyi said in the statement.

SodaStream sells machines that carbonate tap water. The company has targeted big soda makers in ads in the past, criticizing them for making excessive waste.

SodaStream has been the focus of controversy in the Middle East. Protesters claimed victory when the company closed a factory in the West Bank in 2014, which the opponents said was part of Israel's illegal occupation of the territory. SodaStream has argued that boycotts and protests have hurt Palestinians more than helped them.

Goldman Sachs and Centerview advised PepsiCo, while Perella Weinberg Partners gave advice to SodaStream.</s>NEW YORK: PepsiCo said on Monday (Aug 20) it was buying Israeli company SodaStream for US$3.2 billion as the US beverage giant contends with falling demand for sugar-laden soft drinks among health-conscious consumers.

SodaStream makes machines that carbonate home tap water, and both PepsiCo and its arch-rival Coca-Cola have been diversifying away from their mainstay fizzy drinks in part to counter the onset of anti-obesity sugar taxes around the world.

The acquisition also is a pitch to consumers concerned about mounting waste from soda cans and plastics in landfills around the world, since SodaStream employs reusable bottles.

PepsiCo chief executive Indra Nooyi, who is stepping down following 12 years at the helm, characterised the purchase of Tel Aviv-based SodaStream as consistent with the US company's sustainability push, which involves pledges on producing healthier goods, boosting water-use efficiency and reducing waste.

"Together, we can advance our shared vision of a healthier, more-sustainable planet," Nooyi said.

SodaStream Chief Executive Daniel Birnbaum said the deal would open new markets to his company through PepsiCo's global distribution and marketing network, adding that the company would keep its operations in Israel.

"Nobody has come here to obtain, to take, to close down and build a copy anywhere else," Birnbaum said at a news conference in Tel Aviv that was attended by incoming PepsiCo Chief Executive Ramon Laguarta.

The company's website celebrated the news with a 20 per cent discount offer using the code "PEPSICO" - but it's only good for 24 hours.

Laguarta said PepsiCo committed to keeping Israel the headquarters for 15 years, praising the company's infrastructure and the "amazing" knowhow of factory staff.

Israeli Prime Minister Benjamin Netanyahu welcomed PepsiCo's commitment to the country, saying "recent large acquisitions of Israeli companies prove not only their technological abilities but also the business abilities which have been developed in Israel."

SodaStream, which is listed on the New York and Tel Aviv stock exchanges, has not been immune to the complex politics in its home region.

In 2015, SodaStream shut down a plant in the West Bank following a boycott campaign that included targeting Hollywood actress Scarlett Johansson after she advertised its product.

Under the cash deal, PepsiCo is to pay US$144 a share for the fizzy water makers outstanding stock, a premium of 11 per cent over its closing price on Friday.

SodaStream's revenues were US$543.4 million, while PepsiCo had revenues of US$63.5 billion.

SodaStream shares were up more 9.7 per cent in mid-morning trading in New York at US$142.46, while PepsiCo was unchanged at US$115.01.

Under Nooyi's vision to move away from traditional sugary sodas, PepsiCo launched Drinkfinity this year, a new beverage based on tap water. Consumers buy flavored pods to inject a choice of tastes into a reusable bottle, such as acai berry, coconut-watermelon and elderflower.

Coca-Cola, for its part, said last week that it was buying a stake in BodyArmor, a maker of sports drinks that is endorsed by retired basketball star Kobe Bryant and offers a diet version of the drink is naturally sweetened.

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.

"With sugary carbonates and juices struggling and no turnaround in sight, mitigating the losses through newer and healthier products will be essential for PepsiCo," he said in a research note.

"Consumers around the world are more and more interested in low-sugar beverage options. Sugar taxes also represent a prominent threat."

"This deal gives PepsiCo sort of a beachhead for at-home water prep systems," said Briefing.com. "It also boosts their 'eco-friendly' reputation, which has been a goal for them.

"Another benefit is that it's not just the water maker sales, SodaStream's business model creates a recurring revenue stream as consumers need to purchase consumable gas refills and flavor packets."</s>US soft drink manufacturer PepsiCo has announced a deal to purchase the Israeli manufacturing company SodaStream for $3.2 billion (€2.8 billion).

The purchase, which is expected to close by January 2019, will see PepsiCo, most famous for the Pepsi soft drink, acquire a company that specializes in the production of home fizzy drink dispensers.

"PepsiCo and SodaStream are an inspired match," said PepsiCo Chairman and CEO Indra Nooyi, adding that SodaStream makes "great-tasting beverages while reducing the amount of waste generated."

Read more: UK soft drink sugar tax comes into force

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.

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 move, coming weeks after Nooyi's departure was announced, suggests Laguarta will continue the strategy Nooyi drove at the company during much of her 12-year period in charge.

Sodastream has grown strongly in Europe and Asia in recent years but growth in the US has been sluggish. PepsiCo's move can be seen in the context of global food and drinks companies increasingly looking to acquire companies with more health-conscious credentials.

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.

Citing financial reasons, Sodastream closed the plant in 2015 and moved to Lehavim, in southern Israel.</s>PepsiCo Breaks Out The Bubbly With $3.2 Billion Deal For SodaStream

PepsiCo has announced plans to buy Israel-based fizzy drink maker SodaStream in a deal valued at $3.2 billion.

It's the latest foray into more-healthful offerings for the food and beverage giant, which has has shifted from soft drinks toward products such as juices, hummus and oatmeal.

"PepsiCo and SodaStream are an inspired match," CEO Indra Nooyi, who has spearheaded the shift toward healthier products, said in a statement Monday. She added that SodaStream is in line with the company's "philosophy of making more nutritious products while limiting our environmental footprint."

SodaStream sells machines that allow people to add carbonation to tap water at home, as well as syrups to flavor it.

"We are honored to be chosen as PepsiCo's beachhead for at home preparation to empower consumers around the world with additional choices," SodaStream CEO Daniel Birnbaum said.

PepsiCo is in the process of expanding its water offerings. Along with water company Aquafina, it owns LIFEWTR (pH balanced water with added electrolytes) and Bubly (a sparkling water brand).

According to The Wall Street Journal, "Sparkling water has grown far more strongly than the overall bottled water category in the U.S., clocking volume growth of 38% last year up from 35% in 2016 according to data from industry tracker Beverage Marketing Corp."

Sales of soft drinks, PepsiCo's traditional products, are struggling. Generally, according to the Journal, "big brands are losing shelf space to smaller, trendier entrants and established players are scrambling for growth."

SodaStream was founded in 1903 by London Gin distiller W & A Gilbey. The company's fizzy drink maker was a hot item in Britain in the 1970s and 80s, Reuters writes, "but its popularity faded as bottled sodas became cheaper."

In recent years, SodaStream was the target of an international boycott because it was operating in the occupied West Bank, in the Israeli settlement of Ma'ale Adumim. The controversy received major international attention when Scarlett Johansson started doing commercials for the company. At the time, the actress also was working with the charity Oxfam, which opposes Israeli settlements in the West Bank — a role she left in 2014 because of her work with SodaStream.

The company now operates a different factory, in southern Israel, and completely closed its West Bank factory in 2015, as NPR reported. About 500 Palestinians lost their jobs because of the move.

The Israeli firm's shares jumped by more than 9 percent Monday morning, after the deal was announced. It was unanimously approved by the boards of directors of both companies, and is expected to close by January 2019 pending a SodaStream shareholder vote and regulatory approval.</s>(Reuters) - PepsiCo Inc (PEP.O) said on Monday it would buy Israel-based Sodastream (SODA.TA), which makes fizzy drink-making household devices, in a deal valued at $3.2 billion.

PepsiCo will acquire Sodastream for $144 per share in cash, the companies said in a statement.</s>The deal is seen as part of Pepsi’s push into more health-conscious beverage markets.

PepsiCo has entered into an agreement to buy SodaStream, the maker of carbonated-drink machines, for $144 per share, a 32% premium to the 30-day, volume-weighted average price of the company’s shares. The price also represents a 10.9% premium to SodaStream’s closing price on Friday. The deal is valued at $3.2 billion, the companies said.

PepsiCo said the deal was part of its effort to promote, “health and wellness through environmentally friendly, cost-effective, and fun-to-use beverage solutions.” SodaStream markets itself as a health-conscious and environmentally-conscious alternative to soda. PepsiCo agreed to buy Bare Foods in May and KeVita drinks in late 2016.

The deal will be funded with PepsiCo’s cash on hand, the companies said.

According to Euromonitor, sales of carbonated soft drinks have been flat while bottled water sales have grown at a 6.2% compound annual rate for the last five years.

“With sugary carbonates and juices struggling and no turnaround in sight, mitigating the losses through newer and healthier products will be essential for PepsiCo,” Euromonitor International analyst Matthew Barry told Reuters.

Analysts say the deal also gives PepsiCo a way to reach consumers directly in their homes. Seventy percent of shoppers are expected to buy groceries online by 2025, according to Food Marketing Institute and Nielsen.

“PepsiCo and SodaStream are an inspired match,” PepsiCo Chairman and Chief Executive Officer Indra Nooyi said.

SodaStream CEO Daniel Birnbaum said the transaction marked an important milestone in the Lod, Israel-based company’s journey. “It is validation of our mission to bring healthy, convenient, and environmentally friendly beverage solutions to consumers around the world,” he said.

Nooyi’s role is being taken over by Ramon Laguarta later this year. She has been CEO of PepsiCo for 12 years.

The companies said the deal was expected to close by January 2019, subject to shareholder approvals. It was unanimously approved by both boards.
PepsiCo announces its intent to buy SodaStream, a manufacturer of products for in-home soft drink production, for US$3.2 billion. The deal awaits approval by regulators.