Remember meForgot password?
    Log in with Twitter

article imageAurora Cannabis to buy CanniMed Therapeutics for C$1.1 billion

By Karen Graham     Jan 24, 2018 in Business
Toronto - Canadian marijuana producer Aurora Cannabis Inc. agreed to acquire CanniMed Therapeutics Inc. in a sweetened C$1.1 billion ($852 million) cash-and-stock deal, creating the world’s largest marijuana producer by market value.
The deal follows months of tensions after Aurora made a hostile bid of C$24 per share for CanniMed, who was in the middle of a deal to buy Newstrike Resources Ltd. As part of the merger deal, CanniMed agreed to terminate the takeover of Newstrike and will pay the company a C$9.5 million break fee, reports CBC Canada.
Aurora's new offer, which was accepted on Wednesday, includes some cash along with shares. CanniMed shareholders will receive 3.4 Aurora shares or a combination of cash and shares, with the maximum cash available set at C$140 million. Based on Aurora share price of $12.65 and the 3.40 exchange ratio, the new offer would come out as $43 per share.
"We are very pleased to have come to terms with CanniMed on this powerful strategic combination that will establish a best-in-class cannabis company with operations across Canada and around the world," Aurora chief executive Terry Booth said.
Canada is the second country to fully legalize recreational marijuana use.
Canada is the second country to fully legalize recreational marijuana use.
Lars Hagberg, AFP/File
Aurora shares closed at $14.79 on the Toronto Stock Exchange on Tuesday making the offer worth about $50.29. CanniMed shares closed at $37.51. According to Bloomberg, this makes the deal worth C$1.23 billion ($1 billion) cash-and-stock, an even sweeter deal.
CanniMed chief executive Brent Zettl said the deal was a testament to the team at CanniMed, saying, "This transaction clearly confirms that the company has been highly successful in becoming a preeminent global leader in the medical cannabis industry."
"It has been quite a long road but it’s been well worth it," Cam Battley, the chief corporate officer at Aurora, said in a phone interview. "We’re going to create something new and very special in this sector."
With the purchase of CanniMed, Aurora has set the company up to better meet domestic demand, as well as enable it to increase international distribution as more countries approve the use of medical marijuana. The deal also sets Aurora up to be in a prime position ahead of Canada’s legalization of recreational use of marijuana, slated to take place later this year.
Canada will become only the second country in the world to legalize marijuana. In Uruguay, marijuana is fully legalized for both medical and recreational purposes.
More about aurora cannabis, CanniMed, marajuana, Medical Marijuana, Investors
Latest News
Top News