"Together, we can advance our shared vision of a healthier, more-sustainable planet", Nooyi said.
In one of her final acts as chief executive officer of PepsiCo, Indra Nooyi is betting on a razors-and-blades kind of business model to reanimate revenue growth that has been waning due to weak demand for traditional sugary soft drinks. SodaStream chief executive officer Daniel Birnbaum has shifted the Israeli company's focus from making at-home soft drinks to producing carbonated water.
Under the deal, announced before the market opened, PepsiCo has agreed to acquire all outstanding shares of SodaStream for $144.00 per share in cash, which represents a 32 percent premium to the 30-day average price. SodaStream makes machines that carbonate home tap water.
He adds: "SodaStream is highly complementary and incremental to our business, adding to our growing water portfolio, while catalysing our ability to offer personalised in-home beverage solutions around the world".
More recently, the Israel-based company reinvented itself as a fizzy water company popular with younger and more health- and environmentally-conscious consumers, who want to drink less soda and use fewer plastic bottles.
Morningstar analyst Sonia Vora said acquisition fit well with PepsiCo's push for "more natural and nutritious offerings", but added that it was unlikely to significantly boost earnings because of SodaStream's small size.
Earlier this month, SodaStream reported its strongest results in company history, a 31 percent year-over-year jump in revenues to $172 million, an 89 percent leap in operating profit to $32 million and an 82 percent climb in net profit to $26 million.
Nooyi is stepping down from the top job at PepsiCo later this year, but the move shows that Pepsi's CEO-elect, Ramon Laguarta, will continue focusing on healthier alternatives.
In 2015, SodaStream shut down a plant in the West Bank following a boycott campaign that included targeting Hollywood actress Scarlett Johansson after she advertised its product.
Three years ago, the firm shut down its West Bank factory amid global boycott calls and opened a sprawling new factory deep in Israel's Negev Desert instead.
Goldman Sachs and Centerview advised PepsiCo, while Perella Weinberg Partners gave advice to SodaStream.