Organigram Global plans to acquire Aurora Cannabis in a deal that would combine two of Canada’s largest licensed producers.
Under the terms of the deal announced Tuesday, Organigram will acquire Aurora’s outstanding common shares for 7.80 Canadian dollars per share, with shareholders able to receive cash, Organigram stock or a combination of both, subject to certain limits, according to a joint news release issued by the companies.
The transaction values Aurora at approximately 561 million Canadian dollars ($400 million) on a fully diluted equity basis, a 93% premium to its unaffected Aug. 10 closing share price on the Toronto Stock Exchange, before Curaleaf Holdings announced plans to launch a hostile takeover bid.
Both companies’ boards unanimously approved the agreement, which is expected to close in January 2027, pending shareholder, regulatory and court approvals.
How would Aurora expand Organigram’s global reach?
“This transaction is a defining step in Organigram’s strategy to build a disciplined, global cannabis leader,” Organigram CEO James Yamanaka said in a statement.
“By bringing together Aurora’s established global medical cannabis platform with our Canadian operations and growing international footprint, we are creating a larger, stronger and more diversified company.”
Organigram operates primarily in the Canadian adult-use market, but its April acquisition of Germany’s Sanity Group significantly expanded its international footprint. The deal gave Organigram a stronger presence in Germany and a platform for further expansion across Europe.
Aurora, meanwhile, has shifted its focus to medical cannabis, with operations in 12 countries, including key markets such as Germany, Poland and Australia.
The combined company would have a diversified footprint across adult-use and medical cannabis markets, including five facilities certified under European Union Good Manufacturing Practice standards, according to the news release.
The companies said they have identified more than 50 million Canadian dollars in potential synergies through expanded distribution, procurement efficiencies and other operational savings.
Aurora shareholders are expected to hold approximately 35% of the combined company’s economic ownership on a fully diluted basis and 42% of its voting rights, according to the companies’ regulatory filing.
How does Organigram’s deal compare with Curaleaf’s bid?
“Combining with Organigram will accelerate Aurora’s international growth strategy by strengthening commercial execution, expanding our product and R&D capabilities and extending our global operating network,” Aurora Executive Chairman and CEO Miguel Martin said in a statement.
“For Aurora’s shareholders, the transaction is the result of a robust strategic review process and delivers compelling value today, meaningful choice in how they receive it and the opportunity to participate in the future of a leading cannabis company.”
Curaleaf launched a hostile takeover bid for Aurora in August that valued the company at approximately $272 million. Its initial offer was valued at $4 per share in a combination of Curaleaf stock and cash.
On Oct. 6, Curaleaf increased its offer to an implied $5 per share, but Aurora’s board rejected the revised bid.
Organigram’s offer represents a 21% premium to Curaleaf’s revised bid, based on the companies’ valuation of the competing offer as of Nov. 2.
Aurora’s board continues to recommend that shareholders reject Curaleaf’s hostile bid and vote in favor of the Organigram transaction.
