PepsiCo (NASDAQ: PEP) announced plans Monday to acquire at-home carbonated drink maker SodaStream (NASDAQ: SODA) for $3.2 billion.
Purchase, New York-based PepsiCo agreed to pay $144 per share in cash for SodaStream's outstanding stock, a 32% premium to its 30-day volume weighted average price.
The deal gives PepsiCo a new line through which it can reach customers in their homes rather than through stores. It comes as U.S. grocers are in a state of transformation, with 70% of shoppers expected to buy groceries online by 2025, according to Food Marketing Institute and Nielsen.
Meantime, retailers are squeezing brands on price and giving increasing shelf-space to upstart and private label brands.
With this move, experts say, PepsiCo is doubling down on its drinks business, which has struggled in North America as consumers move away from sugary, carbonated beverages. It also seemingly addresses the challenge that buying new drink brands risks cannibalizing its legacy beverages.
Tel Aviv-based SodaStream makes a machine and refillable cylinders through which users can make their own soda or carbonated water drinks. Experts say that the deal is a further chance to broaden its reach through PepsiCo's global footprint. It now distributes in 80,000 individual retail stores across 45 countries. Its biggest markets are Germany, France, Canada and the U.S.
Prior to the deal's announcement, SodaStream shares had gained nearly 85% this year. Shares in PepsiCo took on 35 cents to $115.31, while SodaStream gained $12.74, or 9.8%, to $142.59
