PepsiCo Plans US$3.2 Bn Acquisition of SodaStream

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SodaStream

In a quest to increase its customer base and diversify their product portfolio, PepsiCo, the snack and beverage giant, announced on Monday that it plans to buyout at-home carbonated drink maker called SodaStream. The deal is expected to be worth US$3.2 bn.

As per the announcement, PepsiCo would fork out US$144 per share in cash for the outstanding stock of SodaStream. This is a 32% premium to its volume weighted average price of 30 days.

This deal would enable PepsiCo to add one more product to its portfolio that would allow it to reach straight into customers’ homes. This is because, SodaStream which is based out of Tel Aviv, manufactures a machine and cylinders that can be refilled to enable consumers to formulate their own soda or carbonated drinks.

This comes in the wake of the transformation that the grocers in the U.S. are ushering in by going online. By 2025, shoppers are predicted to go completely online, states Food Marketing Institute and Nielsen.

This is an astute move by PepsiCo as it would provide a shot in the arm of its drink business which has taken a blow in North America on account of a growing tribe of health conscious consumers increasingly abstaining from unhealthy sugary, carbonated beverages.

The deal is considered to be a one of the boldest moves by CEO Indra Nooyi in her decade-long stint as CEO. She has played a key role in refurbishing the company’s product line by introducing healthier alternatives as opposed to sugary products.

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