Coca-Cola is set to enter the at-home beverage market and more closely rival Sodastream, a company that lets users make their own carbonated beverages at home.

Coca-Cola announced yesterday that it would be partnering with Green Mountain Coffee Roasters, the company behind the wildly popular single-serve coffee Keurig K-cups. As part of the deal, the soda company has agreed to purchase 10 percent of the company – 16.7 million shares – for $1.25 billion, according to the press release.

The purchase will begin a decade-long agreement to collaborate on an at-home cold beverage system, which is set to include single-serve pods so customers can make Coke at home. The new product line is set to be unveiled during fiscal year 2015.

This global relationship combines The Coca-Cola Company’s unparalleled brand, distribution and marketing strengths with GMCR’s innovative technology and beverage system expertise,” Brian P. Kelley, President and CEO of Green Mountain, said in the press release.

The new cold beverage machine will be able to serve carbonated and non-carbonated beverages, including soda, tea and juice, according to Reuters.

The Future’s Still Uncertain

Despite the agreement, Green Mountain retains the option of signing deals with additional cold drink makers, Kelley told Reuters.

For its part, Coca-Cola has the option to up the stakes over the next three years. It could decide to increase its stake from 10 percent to a maximum of 16 percent.

Effects On Rival SodaStream

The deal is bad news for SodaStream, currently the world’s largest manufacturer of home carbonation systems that let consumers make their own soda. And initial news of the deal has left the rival on rocky ground.

SodaStream’s share prices fall more than 8 percent in after-hours trading. But the company seems to have rebounded since yesterday. It closed trading yesterday at $35.79 per share and opened today at $39.25.

Meanwhile, Coca-Cola’s stock rose a modest 3 percent overnight, and Green Mountain’s stock has experienced a major boost. The company closed yesterday at $80.88 per share and opened today at $109.89, an increase of more than a third. Shares are currently holding steady around $105.