Aphria, Tilray merging to create world's biggest cannabis company

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Deal creates a new entity with an equity value of about $4.8 billion

The new company will trade under Tilray’s ticker on the Nasdaq, and Aphria shareholders will own 62 per cent of Tilray’s stock under the terms of the transaction, which was characterized as a “reverse acquisition of Tilray.” Aphria will pay a 23 per cent premium to Tilray’s Dec. 15 closing price of US$7.87.

Aphria gained as much as 15 per cent in premarket trading, while Tilray rose as much as 26 per cent. Other cannabis stocks also jumped premarket, with Sundial Growers Inc. gaining 4.2 per cent and Aurora Cannabis Inc. climbing 4.4 per cent.Aphria Chief Executive Officer Irwin Simon The new company will sell cannabis products across Canada and “be well positioned to pursue growth opportunities” such as medical marijuana in Germany. The companies said Tilray’s Portugal production facility will allow tariff-free access to the European Union.

A combination of beverage assets will also result. Aphria has agreed to acquire U.S. craft beer company Sweetwater Brewing Company, which makes cannabis-infused beverages, and Tilray is a partner of Anheuser-Busch InBev. The combined U.S. operations will focus on Sweetwater and Manitoba Harvest, which makes branded hemp and CBD products.

 

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