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Investing.com — Aphria (NASDAQ:APHA) is buying rival Tilray (NASDAQ:TLRY) in an all-stock deal to build one of the world’s biggest pot companies.
Aphria shareholders will own 62% of Tilray’s stock under the terms of the transaction. The deal pays a 23% premium to Tilray’s Dec. 15 closing price of $7.87. The combined company is valued at about C$5 billion ($3.9 billion) based on Tuesday’s share prices.
“I realized that Aphria needed to expand out of Canada, and merging with Tilray was a great answer because it’s a U.S.-domiciled business with great international assets,” Aphria Chief Executive Officer Irwin Simon, who will be chairman and CEO of the combined group, told Bloomberg.
The U.S. marijuana market is expected to represent 70% of the world’s $94 billion market by 2025, Bloomberg said, citing Euromonitor International.
Still, it’s been a tough year for pot companies. Both Tilray and Aphria’s most recent quarterly sales missed the mark thanks to fewer medical patients and lower selling prices.
Tilray is trading around $9.66 a share, a far cry from its 2018 high of $143.62. Aphria’s had a slightly less bumpy ride, down some 43% from its 2017 high.
