Categories Cannabis, Earnings, U.S. Markets News

Deal Alert: Altria Group buys mammoth stake in Canadian cannabis giant Cronos Group

Phillip Morris-parent Altria Group, Inc. (MO) today announced a deal to invest CAD 2.4 billion (about $1.8 billion) in Toronto-based cannabis giant Cronos Group (CRON).

The equity investment on a private placement basis is in exchange for common shares in Cronos. In addition to this, Altria will also receive Cronos warrants, that if fully exercised, would be an additional C$1.4 billion in proceeds.

At the close of the deal, Altria would hold about 45% ownership interest in Cronos Group shares. Factoring in the exercise of the warrants, the total potential ownership position of Altria would be about 55%.

Marijuana or weed stocks


“This strategic partnership provides Cronos Group with additional financial resources, product development and commercialization capabilities, and deep regulatory expertise to better position the Company to compete, scale and lead the rapidly growing global cannabis industry,” read a statement by the Canadian weed company.

Cronos CEO Mike Gorenstein said, “The proceeds from Altria’s investment will enable us to more quickly expand our global infrastructure and distribution footprint, while also increasing investments in R&D and brands that resonate with our consumers.”

Under the terms of the deal, Altria has agreed to acquire 146.2 million shares of Cronos at a price of CAD16.25 per share — a 41.5% premium to Cronos’ 10-day volume weighted average price on the Toronto Stock Exchange as of Nov. 30, 2018.

The Cronos group board has unanimously backed the deal, which is expected to close in the first half of 2019.

Once the deal comes through, Altria can nominate four directors, including one independent director, to serve on the Cronos Group board, which will be expanded from five to seven directors.

The agreement also makes Altria the exclusive partner of Cronos Group “for pursuing cannabis opportunities throughout the world.” JPMorgan Chase has already given committed financing of about CAD 2.4 million to Altria for the deal.


Follow our Google News edition to get the latest stock market, earnings, and financial news at your fingertips

Most Popular

Key highlights from Halliburton (HAL) Q1 2021 earnings results

Halliburton Company (NYSE: HAL) reported first-quarter 2021 earnings results today. Total revenue decreased by 31% to $3.45 billion from $5.03 billion year on year. The company had a net income

Key highlights from Intuitive Surgical (ISRG) Q1 2021 earnings results

Intuitive Surgical, Inc. (NASDAQ: ISRG) reported first quarter 2021 earnings results today. Revenues increased 18% year-over-year to $1.29 billion, driven by growth in da Vinci procedures and system placements. GAAP net income

Earnings Infographic: Netflix (NFLX) subscriber growth slows; Q1 results beat

Netflix, Inc. (NASDAQ: NFLX) Tuesday said its first-quarter 2021 earnings more than doubled. Both revenues and profit topped the Street view, but the streaming giant's subscriber growth decelerated. At the

Add Comment
Viewing Highlight