Aurora Cannabis has agreed to acquire Uruguayan marijuana producer ICC Labs in a deal valued at 290 million Canadian dollars ($220 million) and would establish the Alberta-based company as a leader in South America.
Reports of the deal surfaced a few weeks ago, though the companies declined to comment at that time.
Under the deal, Aurora would have the capacity to produce cannabis at a lower cost in both Uruguay and Colombia.
Each ICC shareholder will receive CA$1.95 per share, payable in Aurora shares.
The transaction is subject to the approval of ICC shareholders. Union Group, which holds approximately 29% of the issued and outstanding ICC shares, entered into an agreement with Aurora to support the deal.
The transaction is also subject to regulatory approvals.
In an interview with Montevideo-based radio station Carve, Diego Olivera, secretary general of the Uruguayan National Drugs Council, said approval from the anti-money laundering agency could take significant time, depending on the specifics of the transaction.
Olivera expects that Aurora’s move into Uruguay will help ramp up domestic production and supply as well. Uruguay has faced supply issues and periods of time without product available.