PepsiCo shares are in the green in pre-market activity, Monday, amid news the US drinks giant is set to buy Israel-based business, SodaStream.
The purchase, provided it gains full approval, will give PepsiCo a new line of business and allow it to target existing and new customers, who prefer to make their own carbonated drinks at home.
PepsiCo shares ended the US Friday session 0.62% higher at $114.96. The stock is also higher in pre-market activity, ahead of the Monday market open.
News of the deal was announced earlier Monday by the two firms. PepsiCo will buy SodaStream for $144 per share, valuing the company at $3.2 billion. PepsiCo will by SodaStream in an all cash purchase, with no additional borrowing required.
“PepsiCo and SodaStream are an inspired match,” said PepsiCo Chairman and CEO Indra Nooyi.
Nooyi complemented the SodaStream team’s creation of an eco-friendlier approach to the beverage business.
“Together, we can advance our shared vision of a healthier, more-sustainable planet,” she said.
Soda Stream CEO, Daniel Birnbaum, meanwhile, was equally positive on the agreement.
“Today marks an important milestone in the Soda Stream journey. It is validation of our mission to bring healthy, convenient and environmentally friendly beverage solutions to consumers around the world,” Birnbaum said.
PepsiCo leadership change
The news of the SodaStream purchase is the first major announcement since CEO Noori said she would step down from her role with PepsiCo in October 2018, after 24 years with the firm, and 12 years at the helm.
“Leading PepsiCo has truly been the honour of my lifetime, and I’m incredibly proud of all we have done over the past 12 years to advance the interests not only of shareholders, but all our stakeholders in the communities we serve,” said Nooyi.
“Growing up in India, I never imagined I’d have the opportunity to lead such an extraordinary company,” she added.
Ramon Laguarta will succeed Nooyi as the next CEO of the US drinks firm. Laguarta has worked for PepsiCo for 22 years and will be the sixth leader in the company’s 53-year history.