Aurora Cannabis acquires CanniMed for $1 billion

We previously reported on Aurora Cannabis' hostile takeover bid against CanniMed in connection with the latter's partnership with Belgian company Fagron. to distribute Canadian cannabis in Europe.

Medical cannabis producer Aurora Cannabis has finally succeeded in acquiring CanniMed, at a valuation of 1.23 billion Canadian dollars ($1 billion or 650 million euros). This is the biggest financial transaction in the cannabis industry to date.

«We're very pleased to have reached an agreement with Cannimed for this powerful strategic combination that will establish a high-profile cannabusiness in Canada and around the world,» said Aurora CEO Terry Booth.

«The market's recognition of Aurora's continued performance and execution of its strategy since we announced our intention to acquire CanniMed allows us to share this benefit directly with CanniMed shareholders by increasing the offer price and offering a cash component.»

Aurora initially offered to buy CanniMed's shares at 24$ per share, which CanniMed refused. Their shares quickly exceeded this valuation.

CanniMed shareholders will ultimately receive 3.4 Aurora shares per CanniMed share, or a combination of cash and shares. CanniMed shares closed at 37.51$, Aurora shares at 14.79$, valuing the offer at 50.29$ per CanniMed share.

CanniMed CEO Brent Zettl explained that the acquisition was a vote of confidence in his team.

«This transaction clearly confirms that the company has succeeded in becoming a major player in the medical cannabis industry.».

CanniMed was also in the process of buying Newstrike Resources Ltd, another Canadian cannabis grower. The transaction will now be cancelled, and CanniMed will pay 9.5 million $ for the breakup of the purchase.