Starbucks Corporation Seeking SodaStream International Ltd Stake

Starbucks Corporation Seeking SodaStream International Ltd Stake

According to Israeli business media conglomerate Globes, beverage giants Starbucks Corporation (NASDAQ:SBUX) and SodaStream International Ltd (NASDAQ:SODA) are in “advanced talks” regarding the coffee titan taking a significant stake in the global soft drink distributor. The rumored partnerships comes hot on the heels of The Coca-Cola Company (NYSE:KO)’s announcement last month that it was taking a 10% stake in Keurig Green Mountain Inc (NASDAQ:GMCR). Coca Cola paid $1.25 billion for its stake in Green Mountain.

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The Globes article reports that knowledgeable sources say that Starbucks is going to acquire 10% of SodaStream International Ltd (NASDAQ:SODA) in a deal valuing the company at more than $1.1 billion. SodaStream has a current market cap of $850 million, so the offer from Starbucks Corporation (NASDAQ:SBUX) is an almost 30% premium. Sources close to the deal report an official announcement will likely be made in the near future.

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Sodastream statement on Starbuck’s stake

When contacted by the media to comment on the rumored Starbucks Corporation (NASDAQ:SBUX) stake, the company’s spokesperson demurred. “There are always rumors surrounding the company. The company has not responded to rumors in the past, and it will not respond now.”

Sodastream opportunity in the U.S.

Beverage industry analysts have been expecting SodaStream International Ltd (NASDAQ:SODA) to announce some kind of a deal or partnership ever since the Coca Cola-Green Mountain deal was announced a few weeks ago.

A number of analysts have also highlighted that SodaStream International Ltd (NASDAQ:SODA) has a real opportunity for expansion in the U.S., as machines are found in only 1% of American homes, compared with as many as 25% of homes in many European countries. A partnership with Starbucks would give SodaStream a ready-to-go distribution platform, and also enable the company to jump right into a variety of marketing incentives, including sales campaigns and custom flavors only for Starbucks customers.

SodaStream International Ltd (NASDAQ:SODA) is trading up around $6 at $46.45 as of 12:30 PM EDT today on the strength of the rumor.

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