PepsiCo has acquired Israeli home carbonated drinks company SodaStream for $3.2 billion (£2.5 billion) in cash.

The US drinks giant is paying a 10 per cent premium on SodaStream's closing price on Nasdaq yesterday.

Headquartered in Lod, SodaStream is based on a household device for producing carbonated drinks using CO2 cartridges, but has focused in recent years on healthier drinks including sparkling waters and wines.

SodaStream CEO Daniel Birnbaum said the buyout marked a milestone in the company's history.

"It is validation of our mission to bring healthy, convenient and environmentally friendly beverage solutions to consumers around the world," he said.

The company can trace it roots back to London in 1903, when the Gilbey gin distillery "developed an apparatus for aerating liquids" which evolved into the SodaStream machine.

The device was popular in Britain in the 1980s under the slogan "Get busy with the fizzy", when the company became a subsidiary of Cadbury Schweppes.

SodaStream moved to Israel in 1991 when Peter Wiseburgh, himself a British immigrant who had served as its Israel distributor since 1978, bought out the company and renamed it Soda-Club.

In 2007, Israel's Fortissimo private equity fund bought a controlling stake in the company and changed the name back to SodaStream. The company went public on Nasdaq in 2010.

SodaStream became a target for BDS campaigners because its main factory was in Mishor Adumim in the West Bank. However, in 2015 the company closed down the plant and replaced it with a factory in the Negev.

Factories also operate in Ashkelon, Afula and ten other locations worldwide.

SodaStream has in the past irked both Pepsi Cola and Coca Cola by running high profile ad campaigns in the US stressing the environmental damage caused by the plastic bottles of the big drink-makers.

Speaking at a press conference in Tel Aviv on Monday, incoming PepsiCo chief executive Ramon Laguarta has committed to keeping SodaStream production in Israel for at least 15 years.