PepsiCo buying SodaStream for $3.2B
In recent company news, Disney announced its plan to buy 21st Century Fox in a merger that would cost a massive $52.4 billion in stock.
Today, beverage icon PepsiCo announced its plans to acquire SodaStream for $3.2 billion.
The at-home carbonated drink maker, SodaStream, will receive $144 per share for all its outstanding stock, something that CNBCreports is “a 32 percent premium to its 30-day volume weighted average price.”
PepsiCo, with this new acquisition, can now reach customers through their at-home SodaStream device.
“It comes as U.S. grocers are in a state of transformation, with 70 percent of shoppers expected to buy groceries online by 2025, according to Food Marketing Institute and Nielsen.”
The grocery environment sees more shelf space going to upstart, private, and niche brands while traditional companies are “squeezed” for better margins.
“We want to play in a business – home beverages – where we don’t play,” said Pepsi CFO Hugh Johnson.
As of late, PepsiCo has struggled in its North American markets as health-conscious consumers move from high-sugar and carbonated beverages to low-calorie, low-sweetener options.
“PepsiCo is finding new ways to reach consumers beyond the bottle,” said President Ramon Laguarta.
SodaStream, based out of TelAviv, allows users to make their own sodas or carbonated waters at home. Its innovation and popularity can be compared to Keurig at-home coffee makers.
For them, the deal with PepsiCo allows the company to expand its reach by taking advantage of Pepsi's global distribution channels. SodaStream sells its products in 45 countries; its biggest markets are Canada, the U.S., Germany and France.
Earlier this month, SodaStream reported quarterly earnings quite above its own estimates. When its earnings tripled throughout the year, SodaStream shares jumped more than 26%. Just prior to the PepsiCo announcement, SodaStream shares gained nearly 85%.
SodaStream executives will remain with the company when the deal closes.
"We've been on and off talking to [SodaStream CEO Daniel Birnbaum] for a couple of years, not just on acquiring them," said Johnston. "He got convinced the cultural fit would be good."