US giant beverage brand PepsiCo has announced it will buy the Israeli company SodaStream for 3,2 billion dollars, around 2,8 billion euros.
The acquisition, which was given the green light from both companies’ board of directors, still needs a final vote from Sodastream’s shareholders to finalize the deal planned for January 2019.
The acquisition of Sodastream is going to add strength to the image and the strategy Pepsico wanted to establish, by promoting diet products and being environmentally friendly.
The company buyout reflects perfectly the new campaign that Pepsi launched, as it aims to find new ways to reach consumers “beyond the bottle” and to increase focus on its sparkling water products.
“SodaStream is highly complementary and incremental to our business, adding to our growing water portfolio, while catalyzing our ability to offer personalized in-home beverage solutions around the world,” said Pepsi’s incoming CEO, Ramon Laguarta.
Going back on the history of the home soda-maker, we remember that the company relocated from Peterborough to Israel in 2003. Until 2015, its main manufacturing facility was located in the Mishor Adumim industrial park but a high-profile boycott campaign pressured the factory to move to the Negev. As a consequence, 500 Palestinian lost their jobs.
Ali Jafar, a shift manager from a West Bank village who had worked for SodaStream for two years, said: “All the people who wanted to close (SodaStream’s West Bank factory) are mistaken. … They didn’t take into consideration the families.” The lowest salary paid in the
SodaStream factory was more than double the average wage in the PA, so that 500 workers and their dependants (average of 6 dependants per worker) all lost an income sort that would be hard to replace.
According to Daniel BirnBaum, chief executive of SodaStream International, the Palestinans are in fact the main victim of the boycott movement. “It’s propaganda. It’s politics. “SodaStream should have been encouraged to remain in the West Bank if [the Boycott movement] truly cared about the Palestinian people,” Birnbaum said. In 2015 the company relocated it’s production to the Negev.
Many Israelis remember PepsiCo as the company that surrendered to the Arab boycott that was in full effect from Israel’s creating to the late 1980s. Managed by the Arab League from Damascus, the central boycott office of the Arab Policy threatened international companies with Arab boycott if they trade with Israel. PepsiCo has always denied caving into the boycott and claimed that its decision not to enter the Israeli market was due to the size of the country being too small support the franchise. For years the Israeli market was dominated by Coca Cola, until the PepsiCo finally entered the county in 1991.
As PepsiCo is now buying for billions an Israeli company that used to be targeted by boycott, some in Israel see this not only as yet another success of Israeli innovation and economy but also as a sweet note of triumph over boycotters and their agenda of hate.