Confirmed! Aphria & Tilray Merging To Form ‘World’s Biggest Cannabis Company’

Summary

  • Canadian cannabis producers Aphria Inc and Tilray Inc confirmed on Wednesday that they will be joining forces to build the “largest global cannabis company”.
  • The merged company’s pro forma equity value is estimated to be about C$ 5 billion, which has been calculated based on Aphria Inc and Tilray Inc’s closing stock prices on December 15.
  • The combined company is set to be operated under Tilray Inc’s name once the deal is completed.

After building quite the suspense over the last few days, Canadian cannabis producers Aphria Inc (TSX: APHA) and Tilray Inc (NASDAQ: TLRY) have finally shed some light on the reports of their merger. And yes, the speculations are true!

In an official statement released early on Wednesday, December 16, the two giants in the legal pot industry confirmed that they will be joining forces to build the “largest global cannabis company”.

©Kalkine Group Image

Let’s look into the nitty-gritty of this major Aphria-Tilray merger deal:

 

  • While reports had estimated that the Aphria-Tilray entity would the biggest pot enterprise in Canada, the official statement claims that it would be the largest cannabis company in the world, based on the pro-forma revenue. The ‘pro-forma revenue’ basically refers to the revenue reported by the two businesses in their latest quarterly financial results.
  • The merged company’s pro forma equity value is estimated to be about C$ 5 billion in the latest report, which has been calculated based on Aphria Inc and Tilray Inc’s closing stock prices on December 15.
  • Confirming prior speculation, the combined company is set to be operated under Tilray Inc’s name once the deal is completed.
  • The shares will be traded on NASDAQ under ticker of ‘TLRY.
  • Also in line with previous reports, Aphria chief Irwin Simon is set to be the merger entity’s chairperson and chief executive officer, while Tilray CEO Brendan Kennedy gets a seat on the new board of directors.
  • Tilray Inc will get to appoint another member for the new company’s board of directors, while seven seats will go to Aphria Inc.
  • Holding seven out of nine seats at the Board, Aphria Inc would be in control of the merged entity.
  • Aphria Inc shareholders will get a 62 per cent stake in the new combined company’s common shares.
  • Once the deal is completed, the new merged company will have its principal offices based in New York, Seattle, Toronto, Leamington, Vancouver Island, Portugal and Germany.

 

The merger deal is expected to be complete by the second quarter of 2021. Executive of both Aphria Inc and Tilray Inc are scheduled to hold a virtual conference on Wednesday morning to provide more details about the merger.

Stocks of Aphria Inc (TSX: APHA) are currently trending high on the Toronto Stock Exchange. Tilray Inc stocks, meanwhile, are up by nearly seven per cent as of Tuesday.

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