Canadian cannabis companies announce proposed takeover
Organigram Global Inc. is set to acquire Aurora Cannabis Inc. in a proposed transaction valued at approximately C$561 million, according to an announcement issued Tuesday. The agreement covers all issued and outstanding common shares of Aurora Cannabis and would bring the two companies together under one corporate group.
The deal calls for Organigram to pay C$7.80 for each Aurora common share. Aurora shares were temporarily halted from trading on Tuesday as the transaction was announced. The companies presented the agreement as a step toward building a larger international cannabis business, with operations and commercial ambitions spanning Canada, Europe and Australia, as well as other markets.
For readers in Aurora, Ont., the announcement concerns Aurora Cannabis the company, not the Town of Aurora. The source material does not identify a connection between the transaction and municipal operations, services or businesses in the York Region community. Its significance for the local page is primarily as a Canadian corporate and investment story involving a company whose name is often associated with the town.
Offer follows contested takeover effort
The proposed purchase follows a period of heightened interest in Aurora Cannabis. Rumours of an Organigram transaction surfaced in mid-October, after Curaleaf Holdings Inc. disclosed plans for an unsolicited takeover effort. Aurora’s board unanimously rejected Curaleaf’s revised hostile bid on Oct. 6, according to the announcement.
Organigram said its offer represents a 93 per cent premium to Aurora’s unaffected Toronto Stock Exchange share price on Aug. 10, the last trading session before Curaleaf’s initial disclosure. The companies also said the proposed price is 21 per cent above the valuation attached to Curaleaf’s revised offer.
| Transaction detail | Announced figure |
|---|---|
| Offer price | C$7.80 per share |
| Estimated equity value | About C$561 million |
| Premium to Aug. 10 unaffected price | 93 per cent |
| Premium to Curaleaf’s revised valuation | 21 per cent |
Companies point to international expansion
Organigram chief executive James Yamanaka described the proposed combination as an important part of the company’s plan to create a more disciplined global cannabis business. He said the companies would bring together Aurora’s international medical cannabis platform with Organigram’s Canadian operations and expanding international presence.
“This transaction is a defining step in Organigram’s strategy to build a disciplined, global cannabis leader,” said James Yamanaka, CEO of Organigram.
Aurora executive chairman and chief executive Miguel Martin said the combination would support the company’s international growth plans. In the announcement, Martin pointed to stronger commercial execution, broader product and research-and-development capabilities, and a wider operating network as expected benefits of the deal. He also said the transaction followed a strategic review and would provide value and choice for Aurora shareholders.
- The proposed acquisition would combine Organigram’s Canadian operations with Aurora’s international medical cannabis platform.
- The announced consideration is C$7.80 per Aurora share, valuing the company at about C$561 million on a fully diluted equity basis.
- The agreement remains a corporate transaction involving Aurora Cannabis and should not be confused with the Town of Aurora in Ontario.
The announcement does not state that the transaction has closed, nor does the supplied information outline any timetable or conditions for completion. For now, the agreement marks the latest development in a contested effort to determine the future ownership and international direction of Aurora Cannabis.
