PepsiCo on Monday announced its intent to acquire SodaStream, an Israeli manufacturer of the home carbonation product by the same name for $3.2 billion. It is PepsiCo’s latest move to push a more environmentally friendly agenda.
The deal will close by January 2019, according to Fortune, pending approval by regulators and SodaStream shareholders. SodaStream and its current management team will become an independent division of PepsiCo.
PepsiCo CFO Hugh Johnston told Fortune that “in-home beverage creation” represents a new market for the soda seller, noting, “We really do see the two companies as an ideal match in a lot of ways.”
SodaStream CEO Daniel Birnbaum told Fortune that his company appeals to consumers dedicated to reducing their carbon footprints, since the SodaStream machine adds carbon dioxide to reusable bottles filled with tap water.
Birnbaum is expected to earn just under $20 million from the deal.
In 2014, SodaStream was under attack by the BDS movement and B’Tselem, who falsely claimed that its plant in Ma’ale Adumim was built on Arab owned land, and said it violated EU regulations by labeling its products “Made in Israel.” In January 2014 a Paris court ruled that Association France Palestine Solidarité (AFPS), a group campaigning to remove SodaStream from stores, had to pay SodaStream $7,500 in compensation for falsely claiming its products were sold “illegally and fraudulently.”
The company eventually moved the plant in 2015, which resulted in more than 400 PA Arabs losing their jobs – replaced by Israeli Bedouin.
SodaStream has 13 production facilities worldwide, with its principal manufacturing facility located in Idan HaNegev Industrial Park north of Beer Sheva. An additional plant began operating in 2011 in Ashkelon. In Europe, the company employs 250 people, in two main sites, in Rijen, Netherlands, and Limburg an der Lahn, Germany. The company’s US headquarters is at Mount Laurel, New Jersey.
According to Fortune, the purchase gives SodaStream access to 200 countries covered by PepsiCo, compared with SodaStream current presence in 46 countries. The acquisition opens up the German market to the Israeli company, which currently enjoys only an 8% penetration there.
Responding to the acquisition, PM Benjamin Netanyahu said, “The recent major acquisitions of Israeli companies prove not only the technological capabilities that have been developed in Israel but the business capabilities as well. I welcome this huge deal that will enrich the state treasury and also the important decision to keep the company in Israel.”