PepsiCo chief executive Indra Nooyi, who is stepping down following 12 years at the helm, the purchase of Tel Aviv-based SodaStream fit in with the USA company's sustainability push, which involves pledges on producing healthier goods, more efficient use of water and reducing waste.
"Together, we can advance our shared vision of a healthier, more sustainable planet". SodaStream sells machines used with compatible carbon dioxide capsules and optional flavoured syrups, and its success in locking in customers allowed it to recently raise its full-year outlook.
"SodaStream is highly complementary and incremental to our business, adding to our growing water portfolio", said Ramon Laguarta, who is set to replace Nooyi in October.
In March, PepsiCo launched squash drink Drinfinity aimed at health-conscious millennials.
SodaStream CEO Daniel Birnbaum called the deal an "important milestone".
"It is validation of our mission to bring healthy, convenient and environmentally friendly beverage solutions to consumers around the world", he said. Speaking to CNBC, PepsiCo CFO Hugh Johnston said, "We get to play in a business - home beverages - where we don't play".
Last year, SodaStream told Marketing Week it wanted to create a "cult brand" and was exploring expanding into the beer market.
Pepsi said its strong global distribution capabilities would position SodaStream for further expansion.
SodaStream, which has incurred the wrath of pro-Palestinian activists for its factory in a large West Bank settlement, agreed terms with PepsiCo this week, with the American soft drink giant promising to expand the company's reach. This is likely to attract the 35% of consumers globally surveyed by GlobalData in Q3 2018 who claim they would buy more of specific types of products if they were "packaged without any plastic at all".
The deal between Pepsi and Sodastream still needs to clear cursory regulatory hurdles, but PepsiCo plans to pay $144 (£113) cash per SodaStream share in the transaction using cash on hand.