Aphria Inc. (NASDAQ: APHA) and Tilray Inc. (NASDAQ: TLRY) reported entry into a definitive agreement to merge their businesses to create the world’s largest global cannabis company. The implied pro forma equity value of the newly combined company is a total of C$5 Billion or USD 3.9 Billion which is based off the share price of Tilray and Aphra at the market close of December 15th, 2020.
Aphria shareholders shall receive 0.8381 shares of Tilray for each Aphria common share. Whereby Tilray shareholders will continue to hold their shares with no adjustments. Upon completion of the agreement Aphria shareholders shall own 62% of the outstanding Tilray shares on a fully diluted basis which results in a reverse acquisition of Tilray, representing a 23% premium on the share value at the close of December 15th, 2020. “This is an exciting day for both companies including our 2,500 employees, for the cannabis industry, and for patients and consumers around the world. We are bringing together two world-class companies that share a culture of innovation, brand development and cultivation to enhance our Canadian, U.S., and international scale as we pursue opportunities for accelerated growth with the strength and flexibility of our balance sheet and access to capital,” said Mr. Simon. “Our highly complementary businesses create a combined company with a leading branded product portfolio, including the most comprehensive Cannabis 2.0 product offerings for patients and consumers, along with significant synergies across our operations in Canada, Europe and the United States. Our business combination with Tilray aligns with our strategic focus and emphasis on our highest return priorities as we strive to generate value for all stakeholders.”
“I am honoured to work with Brendan Kennedy, a pioneer in the cannabis industry, and the Tilray team as they join forces with our talented employees at Aphria,” continued Mr. Simon. “I look forward to leading the talented teams of both Aphria and Tilray as we seek to create a leading global cannabis and consumer packaged goods company with a portfolio of medical, wellness and adult-use brands consumers love.”
Mr. Kennedy, Tilray’s Chief Executive Officer, commented, “We are thrilled to bring together two cannabis industry leaders. At this nascent stage of development and expansion of the global cannabis market, we believe companies with leading geographic scale, product range and brand expertise are most likely to benefit long-term. By leveraging our combined strengths and capabilities, we expect to be able to meet the needs of consumers more effectively all over the world and advance patient care. With a strong financial profile, low-cost production, leading brands, distribution network and unique partnerships, we believe the Combined Company will be well-positioned to deliver sustainable, attractive returns for stockholders. I look forward to working with Irwin and the Combined Company’s management team to make our consumer products more accessible around the world.”