Organigram and Aurora Cannabis have unveiled an agreement to bring their businesses together, marking a significant development in the Canadian industry following months of pressure from U.S.-based rival Curaleaf, which had been pursuing an unsolicited acquisition of Aurora.
The proposed combination will unite the companies’ operations across Australia, Canada, and Europe, creating a broader international business with complementary strengths. Organigram brings an established recreational cannabis business in Canada, extensive production infrastructure, research, and development capabilities, and medical marijuana operations in Europe.
Aurora contributes its international medical marijuana business, established overseas distribution channels, and manufacturing facilities certified under European Union Good Manufacturing Practice (EU-GMP) standards.
The merged entity will continue to have financial backing from BT DE Investments, which is part of the British American Tobacco group and serves as a key investor in Organigram.
Under the agreement, Organigram will acquire Aurora at a share value of $5.59. The proposed purchase places Aurora’s value at roughly $401 million.
According to the companies, the offer represents a 93 percent increase over Aurora’s unaffected closing stock price on the Toronto Stock Exchange on Aug. 10. It also exceeds the value attached to Curaleaf’s outstanding hostile proposal by approximately 21%.
Organigram chief executive James Yamanaka described the agreement as an important milestone in the company’s ambitions to establish a financially disciplined international marijuana business. He said combining the two companies would create greater scale, diversify operations, and strengthen their ability to respond to rising demand in international markets.
Yamanaka also highlighted the potential benefits of bringing together their expertise, production capabilities, financial resources, and existing commercial networks, with profitability and sustainable expansion among the priorities.
Aurora chief executive Miguel Martin said the arrangement would support the company’s overseas expansion plans by improving commercial operations and extending its international infrastructure.
He added that the agreement followed an extensive strategic assessment and offered Aurora investors an attractive financial outcome. Shareholders would also have flexibility in deciding how to receive consideration, alongside an opportunity to retain exposure to the future performance of the combined business.
The proposed transaction follows an increasingly contentious dispute over Aurora’s ownership. Last week, Curaleaf addressed a decision by Alberta’s Securities Commission concerning Aurora’s ATM share issuance program.
Curaleaf chairman and CEO Boris Jordan argued that the regulatory decision did not resolve the concerns his company had raised about Aurora’s handling of the takeover process.
Jordan questioned why Aurora had issued shares through its ATM program below Curaleaf’s initial offer price after being informed that a proposal was forthcoming. He also challenged the company’s assessment of Curaleaf’s revised offer, which he said represented an 86% premium but had still been characterized as insufficient.
He further criticized Aurora’s refusal to provide Curaleaf with access to customary due diligence while other parties were permitted to proceed, arguing that shareholders should have the opportunity to assess an informed process before deciding on the company’s future.
Other medical cannabis firms in the country, such as Canopy Growth Corp. (NASDAQ: CGC) (TSX: WEED), will be analyzing how the merger could impact the overall industry’s dynamics within Canada.
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