Atlanta-based Coca-Cola Company’s biggest competitor purchased the Israeli carbonated drink-machine maker SodaStream this week for $3.2 billion.
PepsiCo’s outgoing CEO Indra Nooyi said the companies are “an inspired match” because both aim to reduce waste and limit their environmental footprint.
Popularity in sparkling water drinks reached a fever pitch in recent years.
Israel-based SodaStream, the leading sparkling water brand, cornered the market on young, health- and environmentally-focused consumers with its sparkling water maker for the home. SodaStream’s products are available at more than 80,000 individual retail stores across 45 countries. The first version was introduced in 1903 in England.
Pepsi’s purchase comes on the heels of Coca-Cola’s announcement to buy a minority ownership stake in sports drink maker BodyArmor; the amount was undisclosed. Coca-Cola produces the sports drink Powerade, while PepsiCo makes the more popular Gatorade. SodaStream CEO Daniel Birnbaum said that the deal validates the “mission to bring healthy, convenient and environmentally-friendly beverage solutions to consumers around the world.”
PepsiCo will pay $144 per SodaStream share in cash, representing a 10.9 percent premium to Friday’s closing price of the U.S.-listed stock and a 32 percent premium to its 30-day average. SodaStream’s U.S.-listed shares were up 10.5 percent in pre-market trading.
SodaStream was under fire three years ago when its West Bank factory closed amid international boycott calls. The company opened a factory in Israel’s Negev Desert instead. Actress Scarlett Johansson was previously a brand ambassador for SodaStream and parted ways with the international charity, Oxfam, because of a dispute over her work with the fizzy water giant.