SodaStream Surges on a Possible Investment by Starbucks: Report

NEW YORK (TheStreet) - SodaStream International (SODA) is surging 13% after an Israeli publication said Starbucks (SBUX) was in "advanced talks" to acquire a 10% stake in the at-home cold carbonated beverage maker.

According to Globes, the stake would value SodaStream at $1.1 billion. The article cited SodaStream's market cap at $850 million, with Starbucks' offer reflecting a 30% premium. SodaStream's market cap is currently upwards of $950 million due to the stock surge.

The Globes sources said an announcement of a deal will be made soon. SodaStream is based in Airport City, Israel.

Shares of SodaStream were rising 12.6% to $45.54 following the report, while Starbucks shares were falling 0.79% to $70.59.

In February, Coca-Cola (KO) announced it had acquired a 10% stake for $1.25 billion in Green Mountain Coffee Roasters (GMCR), the maker of the single-serve Keurig machine, in order to collaborate on rolling out the forthcoming Keurig Cold machine likely sent SodaStream into a tailspin.

The Globes report states that SodaStream has been seeking a partner, according to "market sources" similar to the Coca-Cola and Green Mountain deal. Pepsi (PEP), Dr. Pepper Snapple (DPS) and Starbucks have been previously named as potential investors.

Despite European popularity, SodaStream's machines are only in 1% of American homes, compared to 25% of homes in Europe. A collaboration with Starbucks could open up a larger distribution platform and marketing incentives, "such as sales campaigns and special flavors for Starbucks customers," the article says.

At the time of the Coca-Cola and Green Mountain deal, Wall Street had pondered whether a Starbucks and SodaStream combination wouldn't be so far-fetched, given Starbuck's experimentation into "handcrafted cold carbonated beverages, which should be rolled out to one-third of its stores this summer," according to a February research note by Wells Fargo Securities analyst Bonnie Herzog.

Starbucks declined to comment when TheStreet asked for comment. SodaStream declined to comment on the rumor according to Globes.

--Written by Laurie Kulikowski in New York.

Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

More from Stocks

What You Need to Know About Facebook and Europe's New Privacy Rules

What You Need to Know About Facebook and Europe's New Privacy Rules

8 Bold Moves General Motors Could Make to Rev Up Its Battered Stock Price

8 Bold Moves General Motors Could Make to Rev Up Its Battered Stock Price

Is Your Investment Portfolio Prepared for Trade Wars, Inflation and More Trump?

Is Your Investment Portfolio Prepared for Trade Wars, Inflation and More Trump?

GE Is Too Opaque, Too Diversified and Too Poorly Managed: Doug Kass Insider

GE Is Too Opaque, Too Diversified and Too Poorly Managed: Doug Kass Insider

Dow Falls Over 200 Points as Apple's Slump Offsets Gains in General Electric

Dow Falls Over 200 Points as Apple's Slump Offsets Gains in General Electric