- Canadian firms Aphria Inc and Tilray Inc have agreed to merge their businesses, which would form the world’s largest cannabis company by sales
- The all-share deal will give the new entity a stock market valuation of C$4.8 billion
- Canada had legalised both medicinal and recreational marijuana in 2018, opening the doors for a fast-growing sector
Canada cannabis companies Aphria Inc and Tilray Inc have agreed to merge their business to form the world’s largest weed firm by sales. Tilray and Aphria have announced an all-share deal giving the new company a stock market valuation of C$4.8 billion (£2.8 billion).
It’s worth noting that the aggregate revenue of the two firms in the last 12 months was around £507 million, which is one of the highest in the sector.
Under the new deal, the shareholders of Aphria will get 0.8381 shares of Tilray for each Aphria common share, which would mean 62 per cent stake in Tilray. This will lead to a reverse acquisition of Tilray. The merged entity will have its main offices in New York, Seattle, Leamington, Toronto, Vancouver Island, Portugal and Germany.
The merged company, which will be supported by the low-cost cultivation and manufacturing facilities, will have an entire portfolio of branded Cannabis 2.0 goods in Canada. Also, the merged entity will be well positioned to expand its footprints in the market with the help of Aphria’s medical and distribution channels in Germany and Tilray cannabis production capability in Portugal.
In 2018, Canada moved to legalise recreational marijuana. At one point in time, there were nearly around 500 registered cannabis companies in Canada. Experts feel that this paved the way for many businesses to thrive in the segment.
Aphria CEO and Chairman Irwin D. Simon said the merger would bring the two leading companies together and will lead to better innovation, brand development and cultivation which will boost the market in Canada, the US and other regions.
He said both the companies would ensure to expand their operations through proper planning and innovative solutions.
Echoing similar views, Tilray CEO Brendan Kennedy said the firm is looking forward to work with Aphria Inc. As part of the deal, Simon is set to become the merged company’s chairperson and CEO, while Kennedy will be included on the new board of directors.
Tilray and Aphria said the merged entity would save nearly £58 million in annual costs within a year.