PepsiCo buys countertop seltzer-machine maker SodaStream for $3.2bn

New York-based PepsiCo Inc announced on Monday it has acquired Israeli-based SodaStream, a maker of counter top machines for making carbonated drinks from water filled in a reusable bottle and flavours if desired.

The deal which cost PepsiCo $3.2bn will allow it broaden its offerings beyond sugary drinks and promote itself as a maker of “in-home beverage creation”, according to Mr. Hugh Johnston, PepsiCo’s Chief Financial Officer.

“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. That focus is well-aligned with Performance with Purpose, our philosophy of making more nutritious products while limiting our environmental footprint. Together, we can advance our shared vision of a healthier, more-sustainable planet,” said Indra Nooyi, PepsiCo’s outgoing CEO.

Industry Analyst such as U.S.-based Wells Fargo Bank’s Bonnie Herzog isn’t convinced that the deal would do much to help PepsiCo’s efforts to improve volumes in its North American drinks business.

While PepsiCo has come under increased pressure to restructure its flagship North America beverage business amid sagging sales of its trade mark Pepsi-Cola, Mountain Dew and Gatorate, the company said it did not acquire SodaStream because of its soda challenges but rather as an opportunity to expand SodaStream’s sales globally using its distribution reach and to grow SodaStream’s sales in markets where it is already strong such as in Germany and Japan.

Daniel Birnbaum, SodaStream CEO and Director said, “Today marks an important milestone in the SodaStream journey. It is validation of our mission to bring healthy, convenient and environmentally friendly beverage solutions to consumers around the world. We are honored to be chosen as PepsiCo’s beachhead for at home preparation to empower consumers around the world with additional choices. I am excited our team will have access to PepsiCo’s vast capabilities and resources to take us to the next level. This is great news for our consumers, employees and retail partners worldwide.”

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