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Aphria, Tilray Merger To Create The Largest Cannabis Company

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Canadian cannabis companies Aphria Inc. (APHA, APHA.TO) and Tilray, Inc. (TLRY) said Wednesday they have agreed to combine their businesses and create the world's largest global cannabis company based on pro forma revenue. Shares of Aphria are rising more than 9 percent in pre-market activity, while Tilray shares are surging more than 30 percent.

The deal is pursuant to a plan of arrangement, and the implied pro forma equity value of the combined company is about C$5.0 billion, or US$3.9 billion, based on the share price of Aphria and Tilray at the close of market on December 15, 2020.

The companies expect the merger to close in the second quarter of calendar year 2021.
Following the completion of the merger, the combined company will have principal offices in the U.S., Canada, Portugal and Germany, and it will operate under the Tilray corporate name with shares trading on Nasdaq under the ticker symbol "TLRY".

Under the terms of the deal, the shareholders of Aphria will receive 0.8381 shares of Tilray for each Aphria common share, while holders of Tilray shares will continue to hold their Tilray shares with no adjustment to their holdings.

The combined company will have pro forma revenue of C$874 million (US$685 million) for the last twelve months reported by each company, the highest in the global cannabis industry.

The combined company will have a complete portfolio of branded Cannabis 2.0 products in Canada.

Internationally, the company will pursue growth opportunities with Aphria's medical cannabis and distribution footprint in Germany, and Tilray's European Union Good Manufacturing Practices or EU-GMP low-cost cannabis production facility in Portugal, which has export capabilities and tariff-free access to the European Union to meet increasing global demand for medical cannabis.

In the U.S., the combined company will have a consumer-packaged goods presence and infrastructure with two strategic pillars, including SweetWater Brewing Company, a cannabis lifestyle branded craft brewer, and Manitoba Harvest, a hemp food manufacturer and producer of branded CBD and wellness products.

Aphria's current Chairman and Chief Executive Officer, Irwin Simon, will lead the combined company as Chairman and Chief Executive Officer.

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