Once-rival cannabis producers Tilray and Aphria completed their megamerger, the new company announced Monday, forming one of the biggest diversified marijuana, hemp and beer companies in the world.
The new company will operate under the Tilray corporate name, with shares trading on the Nasdaq under the ticker symbol TLRY.
The merger talks took more than a year to play out, overcoming various hurdles related to the COVID-19 pandemic and a rival bidder.
The deal also faced hurdles after it was announced, as Tilray postponed its shareholder vote, amending its bylaws to reduce the required quorum for shareholder meetings the next day.
The combined company creates one of the biggest cannabis businesses in the world, with a market cap of approximately $8.2 billion (10.07 billion Canadian dollars) based on the closing stock prices at the end of April, according to the company’s news release.
The new Tilray will be led by Aphria CEO Irwin Simon, with former Tilray CEO Brendan Kennedy taking a seat on the new company’s board.
It is unclear how much of the combined company’s sales will come from marijuana in the coming years.
In its last quarter before the merger, only about 33% of Aphria’s CA$153 million in revenue was from cannabis, while 57% was from distribution and 10% from alcohol beverages.
Tilray, too, had separate business lines, with 73% of its quarterly revenue coming from medical and recreational marijuana and the rest from hemp.
The new entity is expected to generate approximately $81 million in annual pretax cost-saving synergies within 18 months, according to the news release.
Under the deal, structured as a reverse acquisition of Tilray, each Aphria shareholder will receive 0.8381 Tilray shares for each Aphria share held. That means Aphria shareholders would own roughly 62% of outstanding Tilray shares.
The combined company will be a major player in Europe’s small but growing medical marijuana industry.
In Canada, the company will control about 19% of the recreational cannabis market, estimates ATB Capital Markets, an investment banking and financial services firm in Toronto.