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PepsiCo to buy SodaStream for $3.2 billion, in push for healthier options

That strategy has drawn intense criticism at times, including from activist shareholders. But Nooyi has persisted, noting that sales at the company have grown 81 percent under her tenure.

The deal is a late effort by Indra K. Nooyi, PepsiCo’s departing chief executive, to firmly steer the beverage company toward healthier snack and drink offerings. Under Nooyi it has shifted more and more attention to products like premium bottled water, baked food and veggie chips.

The transaction announced Monday, PepsiCo’s biggest in years, also gives the company another potential source of revenue: refills of flavored syrups and carbon-dioxide gas, in what is often known as the razor-and-blades model. Yet in doing so, the company will try to make work what its big rival, Coca-Cola, could not do four years ago.

Under the terms of the deal, PepsiCo will pay $144 a share, nearly 11 percent higher than SodaStream’s closing stock price Friday. It is expected to close in January, pending approval by SodaStream’s shareholders.

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The two companies have existing business ties, with PepsiCo having tested homemade versions of Pepsi and Sierra Mist using SodaStream machines in 2014.

Founded in Britain in 1903 by a gin distillery employee, what is now SodaStream was largely focused on making sodas at home. It traded hands over the years, with Cadbury Schweppes, until it was acquired by an Israeli counterpart, Soda-Club, in 1996.

It was under that new ownership that SodaStream enjoyed a resurgence in popularity and went public in 2010. Perhaps most importantly for PepsiCo, SodaStream has emphasized in recent years its products’ ability to make flavored sparkling water rather than sodas.

That provides an important avenue for PepsiCo to tap into a growing market, particularly as brands like La Croix have exploded in popularity. (PepsiCo has already unveiled offerings like Bubly that take aim at the sector.)

Buying SodaStream brings another advantage: It would give PepsiCo a way to address consumer worries about the proliferation of disposable plastic, including in drinks containers.

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This article originally appeared in The New York Times.

Michael J. de la Merced © 2018 The New York Times

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