PepsiCo announced on Monday plans to acquire the Israeli based carbonated drink-maker SodaStream for $3.2 billion.
The drink-maker SodaStream helps Pepsi to diversify its products and approach to customers, who can make their own soda at home. The move also contributes to the company's shift to healthier alternatives. PepsiCo will now have a chance "to reach consumers beyond the bottle," as PepsiCo president Ramon Laguarta said in a statement.
The Israeli company makes “great-tasting beverages” while reducing the amount of waste generated, said Indra Nooyi, PepsiCo chairman and CEO. And this is aligned with PepsiCo’s philosophy of “making more nutritious products while limiting our environmental footprint,” added Nooyi.
The Minister of Economy and Industry, Eli Cohen, welcomed the sale of SodaStream: "The promotion of industry and employment, as SodaStream and its CEO have been doing for years, is a national mission to be implemented in the southern periphery," said the minister. "The Ministry of Economy will continue to assist the company, as it has recently done, with a grant of NIS 18 million, with the aim of expanding industry, employment, innovation, productivity and growth in the periphery."
A short time ago, Cohen spoke with SodaStream's CEO Daniel Birnbaum and congratulated him on the deal. The latter reiterated the company's commitment to Israel and the fact that this commitment is part of the agreement. Birnbaum also noted the intention to implement the NIS 90 million investment plan recently approved by the Ministry of Economy, while absorbing 155 new employees, with an estimation of increase.
Once again, SodaStream is in the spotlight.
SodaStream became the target of the boycott, sanctions and divestment (BDS) movement in 2014. The company's move out of the Mishor Adumim in the West Bank to the southern Bedouin town of Rahat in the Negev in 2016 led BDS to proclaim its fake victory over SodaStream. What BDS has actually contributed to was the unemployment of over 500 hundred Palestinian workers and the prevention of further employment in the light of the company's potential expansion.
SodaStream is still one of BDS's boycott targets for what BDS claims as SodaStream's "role in ethnic cleansing of Palestinians in the Negev." Today SodaStream's employment of 400 Bedouins makes it the largest employer of Bedouin in Rahat, Birnbaum said.
SodaStream's shares have jumped 85 percent this year after a 78 percent increase in 2017 and have moved to $130 from $16.31 at the end of 2015.
In second-quarter results issued earlier in August, SodaStream's revenue grew 31 percent to $171.5 million, driven by growth in Germany, France, Canada and the United States, while net profit rose nearly 82 percent.
PepsiCo will acquire SodaStream for $144 per share in cash, representing a 10.9 percent premium to the Friday closing price of SodaStream's US-listed stock, according to Reuters. PepsiCo said it will fund the deal with cash on hand.
PepsiCo's acquisition of SodaStream is expected to be finalized by January 2019.
Reuters contributed to this report.
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