Starbucks in talks to buy minority stake in Israel's SodaStream

24 April 2014

Share price of SodaStream International shot up by nearly 14 per cent yesterday after a newspaper reported that US coffee giant Starbucks is in advance talks to buy a minority stake in the Israeli home carbonated drinks system maker.

Israeli financial newspaper Globes yesterday reported that Starbucks is in "advanced talks" to buy a 10 per cent stake in SodaStream, in a deal that values the company at $1.1 billion.

The valuation represents a 30-per cent premium to SodaStream's Tuesday market closing price of $40.43, giving it a market cap of $844 million.

Reacting to the report, SodaStream said, "There are always rumors surrounding the company. The company has not responded to rumors in the past, and it will not respond now."

This is not the first time that market has speculated on SodaStream being in talks with a US beverage company.

Last June, Israeli media had reported that PepsiCo was in talks to buy SodaStream for $2 billion. (See: PepsiCo in talks to buy Israel's SodaStream for $2 bn: report)

But PepsiCo's CEO Indra Nooyi denied that the company is in talks to buy SodaStream.  It is "totally and completely untrue," she told CNBC.

SodaStream manufactures beverage carbonation systems, which allows consumers to easily transform ordinary tap water instantly into carbonated soft drinks and sparkling water.

The company also makes more than 100 different types of concentrated syrups and flavourings to make carbonated drinks.

It offers convenience by eliminating the need to carry bottles home from the market, or store them and dispose empty bottles.

Its products are available at more than 60,000 retail stores, in 45 countries, including home and electrical appliance stores, hypermarkets, supermarkets, department stores, convenience stores, specialty and "green" stores, water specialists and dealers, as well as online and in catalogs.

The company has 22 production sites in Israel and around the world, with three major plants in Negev and Alon Tavor in Israel and in the West Bank settlement of Ma'ale Adumim.

Its intellectual property portfolio includes 65 patents and 198 trademark registrations worldwide.

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