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Summary
- Cannabis manufacturers Aphria Inc and Tilray Inc are said to be heading for a merger.
- If its latest merger deal goes through, the combination of Tilray Inc and Aphria Inc would form the largest cannabis company in Canada.
- The two pot companies were still in talks as of Tuesday, December 15.
- After beginning to trend following the news of their possible merger, Tilray stocks leapt by nearly seven per cent and Aphria scrips posted a spike of about two per cent on Tuesday.
Canada-based cannabis manufacturers Aphria Inc (TSX:APHA) and Tilray Inc (NASDAQ:TLRY) are reportedly close to a merger. The two companies are said to be in “advanced talks” and poised to make an official announcement sometime this week.
The two pot companies, which were still in talks as of Tuesday, December 15, are looking at an annualized cost savings of about C$ 100 million with the merger, as per media reports.
What Would Happen If Aphria & Tilray Merge?
While nothing has been officially announced yet, there are quite a few reports from sources regarding what an Aphria-Tilray merger could look like.
- Once merged, the combined company is expected to keep Tilray’s name, while Aphria Inc is reportedly going to get a majority of the board seats.
- Reports also claim that Aphria shareholders could get a 60 per cent stake in the merged company.
- Tilray Chief Executive Officer Brendan Kennedy is likely to get a seat on the board of directors, but lose his tag as an executive head.
- Meanwhile, Aphria CEO Irwin Simon could be looking at heading the combined company.
- Aphria is currently based in Ontario’s Leamington and Tilray is headquartered in British Columbia’s Nanaimo. After the merger, the company headquarter is expected to shift to the United States.
- The merged entity would reportedly control some 19 per cent of Canada’s adult-use recreational marijuana market.
- Going by Tilray and Aphria’s latest quarter results, the two companies combined would hold an annual revenue of over C$ 930 million.
©Kalkine Group Image
Stock Performances: Tilray Inc (NASDAQ:TLRY) & Aphria Inc (TSX: APHA)
Stocks of the two leading pot firms began trending after reports of their possible merger made headlines late on Tuesday. While Tilray stocks leapt by nearly seven per cent, Aphria scrips posted a spike of about two per cent on Tuesday.
Currently priced at C$ 7.87, stocks of Tilray Inc climbed nearly 49 per cent in the last three months. The shares, however, are down about 54 per cent this year.
Aphria stocks, on the other hand, registered a growth of about 52 per cent so far this year. The shares climbed nearly 70 per cent in the last six months and over 68 per cent in the last three months.
Aphria shares are valued at C$ 10.32 at the moment.
Late in November, Aphria purchased US-based craft brewer SweetWater Brewing Company. If its latest merger deal goes through, the combination of Tilray Inc and Aphria Inc would reportedly form the largest cannabis company in Canada.
