Pepsi takes over soda machine manufacturer sodastream

Pepsi takes over soda machine manufacturer sodastream

The U.S. Beverage giant pepsico wants to create an alternative to its flagging main business with sugary soft drinks by taking over the israeli fizzy drinks manufacturer sodastream.

Pepsi offers $144 per share in cash, companies announced monday. This resulted in a total purchase price of approximately 3.2 billion dollars (about 2.8 billion euros).

Sodastream is best known for its domestic sparkling water dispensers, which have opened up a whole new sales niche for pepsi. In the sodastream system, a special bottle is filled with tap water and inserted into a device. Press button – and the water beads. The carbon dioxide comes from a CO2 cylinder. If this is empty, must be re-bought.

Pepsi’s outgoing chief executive indra nooyi is prepared to dig deep into her pocket for the acquisition: the offer made represents a 32 percent premium to the average share price over the past 30 days and is around eleven percent above friday’s closing price. Sodastream’s business has been running smoothly lately: in the second quarter, revenues climbed by almost a third year-on-year to 171.5 million dollars.

Sales growth was particularly strong in western europe, where sales rose by a good 42 percent, thanks in particular to strong demand in germany and france. The company does not provide any information on sodastream’s exact market volume in germany. The german food industry association and the association of the german fruit juice industry e. V. (vdf) did not comment on this when asked. Industry representatives were initially cagey about the consequences of the takeover for the german market. A spokeswoman for the association of german mineral springs said only: "we are monitoring this, but we are not commenting on it."

Pepsi, like its US rival coca-cola, has long been struggling with a downturn in its core business of high-calorie soft drinks. Although the company already has a good counterweight with snack foods such as cheetos and doritos potato and tortilla chips, and quaker oats breakfast cereals, it is not the only company in the world that has a good position in the market. But sparkling mineral water is becoming more and more popular in the USA, so that the new acquisition could fit well into the product range.

Sodastream boss daniel birnbaum described the transaction as an "important milestone". Israel’s prime minister benjamin netanyahu said: "i welcome the huge deal that will enrich the state treasury, as well as the important decision to keep the company in israel."

In 2014, however, the company had come under criticism because it loved to manufacture the spudders in the israeli-occupied west bank. Shortly afterwards sodastream moved its production to israel.

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