May 14, 2018 8:35 am
Updated: May 14, 2018 8:47 pm

Aurora Cannabis to buy MedReleaf in all stock deal worth $3.2 billion

WATCH: There was big marijuana merger in Canada on Monday. Aurora Cannabis bought MedReleaf for $3.2 billion, leaving just two major players in the bud business as Canada prepares to legalize pot. As Robin Gill reports, there's no precedent for this, so are they getting too big for their britches already?

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Aurora Cannabis Inc. has a friendly deal to acquire MedReleaf Corp. in an all-stock transaction valued at $3.2 billion, creating a company capable of producing more than 570,000 kilograms of marijuana per year.

Current shareholders of Aurora would own 61 per cent of the combined company and MedReleaf shareholders would own about 39 per cent.

WATCH: How to buy weed in Canada when it’s legalized

The deal implies a price of $29.44 per MedReleaf common share, 18 per cent above the Friday closing price of $24.90.

The companies will have nine production facilities in Canada and two in Denmark and distribution agreements with Alcanna liquor stores in Alberta, SAQ provincial liquor stores in Quebec, Pharmasave and Shoppers Drug Mart.

WATCH: Aurora Cannabis CCO weighs in on Edmonton facility, job opportunities

The boards of both companies have approved the transaction but the deal requires approval by at least two-thirds of MedReleaf shareholders and a simple majority of Aurora shareholders.

© 2018 The Canadian Press

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