You thought your pandemic dating life was tough – it turned a huge merger on its head

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3 mins read

The Background
Just a few days after cannabis giants Aphria and Tilray launched a website for shareholders to keep tabs on their intention to join forces and create the world’s largest cannabis company, Marijuana Business Daily’s Matt Lamers pored through filings to the U.S. Securities and Exchange Commission to show how long and bumpy the courting road has been — and, notably, how the pandemic dramatically altered the outcome.

Swiping Right
Talks began in October of 2019, but Tilray didn’t make a proposition until January 2020: an all-stock deal with Tilray owning 56% and Aphria 44% under Tilray’s name. Think of this as the move from swiping right to texting…

Way back then, the proposal saw Tilray CEO Brendan Kennedy become the CEO and Aphria CEO Irwin Simon serving as executive chair. Three days later, Aphria countered with a slight adjustment – a 55/45 split of the joint company. 

Pandemic Affect
Then, COVID put a pause on negotiations. CEOs stayed connected while exploring other opportunities (swiping right with others?).

In October 2020, Aphria and Tilray were looking at a new deal. This time, an equity ownership split of 60% for Aphria and 40% for Tilray, “and an assumed debt-for-equity exchange of USD $200 million of Tilray’s convertible notes.” 

On December 16, Tilray and Aphria finally settled on a very different deal. This time, Aphria would take the majority stake in equity ownership with 62% and Tilray would take 38%. And this time, Simon would stay on as CEO — “almost the reverse of the first deal pitched by Tilray,” writes MJ Biz.

Tying the Knot
Now that the deal has made it over regulatory hurdles like Canada’s Competition Bureau, the deal is expected to close in the second quarter of 2021. So, just like your pandemic dating life, cannabis M&A has been altered significantly. At least in the Aphria/Tilray realm, swiping right pre-pandemic is now turning into a pandemic marriage.


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