Kraft, SodaStream in branding deal

A general view of the Kraft Foods Inc headquarters in Northfield, Illinois February 10, 2009.

(Reuters) - Israel's SodaStream International Ltd (SODA.O) partnered with Kraft Foods Inc (KFT.N) to make the U.S. company's branded flavors available with its soda makers, a move that is expected to raise visibility for the brand and the home carbonation segment.

"This is a strategic step forward for SodaStream, as it should increase consumer awareness and credibility for both the brand and the home carbonation category," Oppenheimer analyst Joseph Altobello wrote in a note to clients.

SodaStream shares rose 11 percent to a three-month high of $41.88, but pared some gains to trade up 5 percent at $39.64.

Altobello also said this partnership potentially opens other Kraft beverage brands to SodaStream, including Kool-Aid and Capri Sun.

Initially, Kraft will make available brands such as women's diet beverage Crystal Light and lemonade brand Country Time. This will be the first time that Kraft Foods flavors will be available specifically for use in a carbonated beverage.

SodaStream, which sells its soda-making machines, flavors, carbon dioxide refills, and re-usable carbonation bottles around the world, launched in the United States, the world's largest market for carbonated drinks, about a decade ago.

Kraft, the largest North American packaged food maker, and SodaStream plan to launch the products during the second quarter of 2012.

Kraft shares were trading slightly up at $37.59 on Thursday on the New York Stock Exchange.

(Reporting by Meenakshi Iyer in Bangalore; Editing by Sriraj Kalluvila)