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Altria To Invest In Cronos Group - Quick Facts

Altria Group, Inc. (MO) announced an agreement to acquire newly issued shares in Cronos Group Inc. (CRON, CRON.TO), a global cannabinoid company, headquartered in Toronto, Canada. The transaction represents a 45% equity stake in Cronos Group, at a price of C$16.25 per share, for an aggregate investment by Altria of approximately $1.8 billion (approximately C$2.4 billion). The agreement includes a warrant to acquire an additional ownership interest in Cronos Group at a price of C$19.00 per share exercisable over four years from the closing date. If exercised in full, the warrant would increase Altria's ownership in Cronos Group by 10% to approximately 55%.

"Investing in Cronos Group as our exclusive partner in the emerging global cannabis category represents an exciting new growth opportunity for Altria," said Howard Willard, Altria's CEO.

The Board of Cronos Group determined that the transaction is in the best interest of the Group and unanimously recommended that shareholders vote in favor of the transaction.

Mike Gorenstein, CEO of Cronos Group, 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."

As part of the agreement, at closing, Altria will have the right to nominate four directors, including one independent director, to serve on Cronos Group's Board of Directors, which will be expanded from five to seven directors. Under the Investor Rights Agreement, Altria has agreed to make Cronos Group its exclusive partner for pursuing cannabis opportunities throughout the world, subject to certain limited exceptions.

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