Pepsi this morning announced its intentions to buy Tel Aviv-based beverage company SodaStream for $3.2 billion. The deal comes as more consumers are turning away from sugary beverages and toward more sustainable, in-home options.
The acquisition, which has been unanimously approved by PepsiCo’s shareholders, comes as the soda company is looking to diversify its portfolio and expand its reach globally. Pepsi products are currently available in retail shops in 45 countries, primarily focused on the U.S., Germany, France and Canada.
Among other things, the deal marks a play for the home market, which has proven elusive for Pepsi, as more and more consumers buy grocery supplies online. “We get to play in a business — home beverages — where we don’t play,” Pepsi CFO Hugh Johnston told CNBC.
There’s also a clear sustainability element to all of this, as consumer focus shifts away from single-use plastics. SodaStream has that going for it — a marked advantage over products like the bygone Keurig Kold.
“PepsiCo and SodaStream are an inspired match,” PepsiCo CEO Indra Nooyi said in a press release. “Daniel and his leadership team have built an extraordinary company that is offering consumers the ability to make great-tasting beverages while reducing the amount of waste generated. That focus is well-aligned with Performance with Purpose, our philosophy of making more nutritious products while limiting our environmental footprint. Together, we can advance our shared vision of a healthier, more-sustainable planet.”
Earlier this month, Nooyi announced plans to step down from her role. Under her watch as Chief Executive, Pepsi has shifted toward healthier options, like Bubly, largely seen as competitor to the popular LaCroix line. The SodaStream deal marks another step toward more health conscious offerings from the company.
The deal is expected to close by January.