Pepsi buys SodaStream in bid to bulk up healthier product range

The two drinks companies are ‘an inspired match’, said Pepsi’s outgoing chief executive Indra Nooyi

SodaStream switched focus from sugary soft drinks to sparkling water a few years ago (Reuters)

Soft drinks giant PepsiCo is buying Israel-based SodaStream for $3.2bn (£2.5bn).

PepsiCo, which owns the Pepsi, Lipton and Tropicana drinks brands, as well as Doritos, Walkers and Quaker, will pay $144 for each outstanding share in SodaStream, a premium of more than 10 per cent on the stock’s closing price last Friday.

SodaStream manufactures devices that allow owners to make carbonated drinks at home. While the company was previously known for sugary soft drinks, in recent years it has shifted its marketing focus to sparkling water in a bid to win over more health conscious consumers.

The deal will add to PepsiCo’s healthier offering and should bolster it against the financial impact of initiatives like the sugar tax, which has led the company to spend billions of pounds on reducing the amount of sugar in a large number of its products.

Daniel Birnbaum, SodaStream CEO, 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.

“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.”

The two companies “are an inspired match” said PepsiCo chairman and CEO Indra Nooyi, who earlier this month announced her intention to step down in October.

“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,” she added.

“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.”

Ms Nooyi’s incoming replacement, Ramon Laguarta, said: “SodaStream is highly complementary and incremental to our business, adding to our growing water portfolio, while catalysing our ability to offer personalised in-home beverage solutions around the world.”

SodaStream has faced criticism and calls for a boycott in the past for operating a factory in an illegal settlement in the West Bank, and Hollywood actress Scarlett Johansson came under fire in 2014 for taking up the role of global ambassador for the brand.

The company has since closed its West Bank factory, citing financial reasons.