JERUSALEM, Israel – PepsiCo announced its acquisition of SodaStream, an Israeli-based company, on Monday for a whopping $3.2 billion.
PepsiCo CFO Hugh Johnston told Fortune the acquisition creates a new market for the company.
"We really do see the two companies as an ideal match in a lot of different ways," Johnston reportedly said.
Israeli Prime Minister Benjamin Netanyahu welcomed the "huge deal."
"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," Netanyahu said in a statement.
The deal, slated to close in January 2019, is based on $144 per share in cash, which Fortune described as a 32 percent premium to the average share price. Earlier this month, SodaStream announced its ninth consecutive double-digit revenue growth quarter, calling it the company's "most successful ever."
SodaStream will continue to operate as an independent division and retain its current management team, according to the report.
PepsiCo's history in Israel, as well as SodaStream's, makes the acquisition even more interesting.
PepsiCo did not sell or manufacture its products in Israel until 1992. It's a convoluted story with many twists and turns, which evolved from the Arab boycott of Israel and included both Coca-Cola and Pepsi Cola. The changes came with the advent of the 1993 Oslo Accords.
In 2015, SodaStream moved its main factory from Mishor Adumim, just outside Jerusalem in what the world calls the West Bank – and Israel calls Judea and Samaria – to a new facility in the Negev Desert.
SodaStream CEO David Birnbaum's decision to relocate to southern Israel followed an international campaign by the Boycott, Divestment, and Sanctions (BDS) movement accusing the company of discriminating against its Palestinian Arab workers.
Nothing could have been further from the truth, as CBN News reported at the time.
The factory's closure left 500 of its 1,300 workers without jobs, most residents of cities and towns under Palestinian Authority control, who worked smoothly alongside the Jewish employees.
The BDS movement, which has historically targeted Israeli-owned companies in Judea and Samaria, succeeded in convincing Birnbaum to close the factory in Mishor Adumim.
Birnbaum told CBN News the BDS movement hurts the people it claims to be helping.
"We want to make it with our Palestinian brothers side by side with Jew[s]," Birnbaum said. "And every day we're proving that peace can happen and peace will happen in the Middle East."
SodaStream's popular carbonated water machines eliminate the need for store-bought soda by adding carbon dioxide to water in reusable bottles.
According to Birnbaum, SodaStream has become the world's largest sparkling water brand, with 90 percent of its customer base opting for plan sparkling water.