Pepsi buys SodaStream for a future beyond cola

YouTubeScarlett Johansson in a 2014 advertisement for SodaStream

YouTubeScarlett Johansson in a 2014 advertisement for SodaStream

Drinks and snacks giant PepsiCo has bought Israel's fizzy drink maker SodaStream for $3.2bn (£2.5bn).

"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", Pepsi's incoming CEO Ramon Laguarta said in a statement.

Purchasing the Israeli company, known for DIY seltzer makers like the SodaStream Mix, will push Pepsi's image in a health-focused direction, according to CNN.

The deal is likely to close in January.

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.

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. The $3.2 billion purchase price means Pepsi will pay $144 per SodaStream share-a 32% premium over its 30-day volume-weighted average price.

In 12 years as CEO, Nooyi sought to expand PepsiCo's offering of healthier food and drinks.

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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.

Actress Scarlett Johansson was previously a brand ambassador for the company.

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

"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.

PepsiCo said SodaStream complements its water business, which includes Aquafina and smaller brands Bubly and Lifewtr.

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.

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