PepsiCo Adds Soda Stream’s Fizz In $3.2bn Acquisition


Monday, 20th August: A positive sentiment from both Wall Street on Friday and in overnight Asia trade was replicated on London indices at the open. Miners on the FTSE rebounded from last week’s losses amid Turkey woes, correlating to the bounce in metal prices; steelmaker Evraz leading the pack to sit >4% mid-afternoon (closing +2.81%). A c.1% rise in Copper prices helped Anglo American push 2% higher as trade talks between the US and China look set to commence this week. At the other end of the index, the region’s local accounting software provider Sage Group fell 7% as Deutsche Bank cut its rating amid increased competition in the sector.

The fall out from House of Fraser’s (semi) collapse doesn’t seem to be fading any time soon. Fashion designer Mulberry shed nearly 30% today after revealing it is to set aside £3m to cover the department store’s failings, adding that full year profits could be further affected if tough UK high street conditions continue. House of Fraser owed Mulberry £2.4m before Sports Direct/Mike Ashley saved it from administration, although the businessman isn’t legally obliged to pay creditor debt from before the takeover. Mulberry is the first of the concessions to reveal the damage done by HoF’s collapse, although fashion brands Jigsaw and Karen Millen have already removed stock from their respective concession operations.

Pepsi is adding some additional fizz to its products after today announcing a $3.2bn to buy Soda Stream. Soda Stream, through its machine and refillable cylinders, paves a way in to the more healthy sparkling water at a time where retailers are squeezing brands on price. PepsiCo are set to pay $144 per share in cash. Soda Stream’s shares have surged c.90% higher year-to-date after an impressive quarterly update earlier this month; more than 1 million machines were sold and together with a record 9.7m refillable gas cylinders, the Israel-based beverage company tripled its earnings forecast for the year. The deal has been agreed by both boards, and with regulatory approval, should be tied up in early 2019.

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