Pepsi to Buy SodaStream for $3.2 Billion

Sparkling water acquisition will help soda giant target health-conscious customers.

August 21, 2018

PURCHASE, New York – PepsiCo Inc. will buy SodaStream International Ltd. for $3.2 billion in a move that focuses on health-conscious consumers who are shifting away from sugary soft drinks. The deal is expected to close in January 2019 and likely will fit into Pepsi’s Better For You product category.

According to Pepsi CEO Indra Nooyi, the acquisition meets Pepsi’s goal of “making more nutritious products while limiting our environmental footprint. Together, we can advance our shared vision of a healthier, more sustainable planet,” she said.

Wall Street Journal reports that “PepsiCo has been under pressure this year to restructure its North America beverage business amid weak sales of its core brands Pepsi-Cola, Mountain Dew and Gatorade.” In a move to focus on consumer demands, the cola company saw an opportunity with healthier products such as Aquafina and LIFEEWTR. The company already test-sold Pepsi and Sierra Mist flavors with SodaStream machines in about 50 Bed Bath & Beyond stores.

The countertop machines allow customers to carbonate tap water and add a variety of flavored syrups. In 2016, the Israel-based SodeStream rebranded itself as a sparkling water company instead of maker of homemade sodas, which caused the company’s stock to surge more than 320% in the past two years.

Beverage Marketing Corp. says that the sparkling water category is growing, reporting a volume growth of 38% in 2017 compared to 35% in 2016. SodaStream has seen progress as well, reporting $171.5 million in revenue and an increase of 22% in units sold in Q3 2018.