Altria Group and Philip Morris International are in discussions over a potential all-stock “merger of equals,” the companies confirmed Tuesday.
If the merger comes to fruition, it could have an impact on one of the Canadian cannabis sector’s leading companies.
The investment gave Altria – one of the largest tobacco companies in North America and an investor in alcohol giant Anheuser-Busch InBev – a 45% ownership interest in Cronos.
Altria still has an option to boost its stake to 55% and provide an additional CA$1.4 billion in proceeds for the cannabis company.
Altria also controls a majority of the Canadian company’s board.
Andre Calantzopoulos, CEO of Marlboro parent Philip Morris International, is known to have a cautious approach to the cannabis industry.
Days before Altria announced it was tying up with Cronos last year, Calantzopoulos told Bloomberg, “I don’t think it’s our priority right now to consider cannabis.”
He added that cannabis was “criminal still” in places Virginia-based Philip Morris operates.
Cronos stocks trade as CRON on the Toronto Stock Exchange and the Nasdaq.