What happened

Shares of SodaStream International (NASDAQ:SODA) were bubbling higher today on news that the do-it-yourself soda specialist is being acquired by PepsiCo (NASDAQ:PEP) for $3.2 billion, or $144 a share. 

As a result, the stock was up 9.7% at 11:00 a.m. EDT, to $142.42. That it was trading below the buyout premium indicates some skepticism that the deal will go through as agreed upon. Pepsi stock, meanwhile, was essentially unchanged. 

Two glasses of iced cola on a table.

Image source: Getty Images.

So what  

The news was a surprise on several fronts. First, Pepsi CEO Indra Nooyi recently announced her departure, meaning that absorbing the multibillion-dollar acquisition will fall to new CEO Ramon Laguarta.

Meanwhile, SodaStream is coming off its best quarter ever as revenue jumped 31% to $171.5 million and earnings per share surged 82% to $1.14, both results crushing estimates. 

In addition, Pepsi had tested a partnership with SodaStream years ago, but that seemed to fizzle. Now, Pepsi is buying the sparkling water company at an all-time high, a stiff premium to where it traded years ago.

Pepsi said the deal would advance its Performance with Purpose initiative, helping it transition to healthier and environmentally friendlier products, while SodaStream CEO Daniel Birnbaum said the deal would give his company "access to PepsiCo's vast capabilities and resources to take us to the next level," and added, "This is great news for our consumers, employees and retail partners worldwide."

Now what

The acquisition appears to be a mixed blessing for SodaStream shareholders. It's nice for them to get a pop this morning, but the 11% premium from Friday's closing price seems slim considering SodaStream's momentum and that it's been consistently undervalued by analysts. 

Pepsi said the price was a 32% premium above the 30-day volume weighted average price as the stock surged following its recent earnings report. However, SodaStream shareholders would arguably be better off if the company remained independent as shares had more than doubled over the past year.

The deal is still pending shareholder approval, and there could be some resistance, which might explain why the stock is trading about 1% below the buyout price. 

Assuming the deal does go through, it's expected to close in January 2019.

Jeremy Bowman owns shares of SodaStream. The Motley Fool owns shares of SodaStream. The Motley Fool has a disclosure policy.