Pepsi to buy SodaStream for $3.2 billion

YouTubeScarlett Johansson in a 2014 advertisement for SodaStream

YouTubeScarlett Johansson in a 2014 advertisement for SodaStream

Beverage giant PepsiCo on Monday purchased Israel's fizzy drink maker SodaStream for $3.2 billion U.S., a boon for a company that has enjoyed a resurgence after being targeted by anti-Israel boycotters in the past.

PepsiCo has announced it is buying Sodastream for $3.2bn (£2.5bn).

Purchasing the Israeli company, known for DIY seltzer makers like the SodaStream Mix, will push Pepsi's image in a health-focused direction, according to CNN.

In one of her final acts as chief executive officer of PepsiCo, Indra Nooyi is betting on a razors-and-blades kind of business model to reanimate revenue growth that has been waning due to weak demand for traditional sugary soft drinks.

"Together, we can advance our shared vision of a healthier, more-sustainable planet", she said.

According to The Wall Street Journal, "Sparkling water has grown far more strongly than the overall bottled water category in the US, clocking volume growth of 38% a year ago up from 35% in 2016 according to data from industry tracker Beverage Marketing Corp".

SodaStream sells machines that allow people to add carbonation to tap water at home, as well as syrups to flavor it. PepsiCo said the move is also meant to boost sustainability because consumers fill reusable bottles. The Purchase, New York-based group will use cash on hand to fund the acquisition. It is expected to close by January, pending a SodaStream shareholder vote and certain regulatory approvals.

Speculation about PepsiCo or Coca-Cola buying Sodastream has bubbled for years.

Nooyi is stepping down from the top job at PepsiCo later this year, but the move shows that Pepsi's CEO-elect, Ramon Laguarta, will continue focusing on healthier alternatives.

It reported a 31% year-over-year jump in revenues to $172m (£134m), an 89% leap in operating profit to £32m (£25m) and an 82% climb by net profit to £26m (£20m).

The move will bring Israeli-based SodaStream International Ltd. under American ownership, and give PepsiCo more points for moving to decrease the amount of plastic flowing into landfills and seas.

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