Cannabis giant Aurora to buy rival MedReleaf in $3.2 billion deal

Aurora Cannabis Inc will buy rival MedReleaf Corp for $3.2 billion, adding to what is already the biggest of Canada’s quickly expanding marijuana producers.

Canada has issued more than a 100 licences ahead of legalization in July, but industry players say they are still short of the scale needed to profit and feed growing North American demand for medical and recreational use.

The deal with MedReleaf will bring together two operators with a total production capacity of over 570,000 kg per year of cannabis, through nine facilities in Canada and two in Denmark, the companies said in a joint statement.

The $29.44 per share deal represents an 18.2 per cent premium to MedReleaf’s Friday closing price.

Following the deal, Aurora shareholders will own about 61 per cent of the newly combined company.

Aurora bought CanniMed Therapeutics Inc for $1.1 billion ($852 million) earlier this year.

© Thomson Reuters 2018