A U.S. cannabis company has made a bid to acquire Aurora Cannabis Inc., a company based in Edmonton. Aurora has announced the formation of a special committee to review this unsolicited offer. Curaleaf Holdings Inc., the bidding company, shared its intention to purchase all shares of Aurora, aiming to create a combined cannabis entity operating in 17 countries across Europe, North America, and other global markets.
The bid from Curaleaf comes after unsuccessful attempts to privately negotiate with Aurora’s leadership. Despite sending formal letters of intent on June 23 and July 7 outlining their proposal, Aurora’s board did not engage in discussions with Curaleaf. In response, Curaleaf expressed disappointment at Aurora’s lack of engagement and stated their readiness to directly approach Aurora shareholders with their proposal.
Curaleaf has proposed a payment of $4 US per share to Aurora shareholders, along with an additional $0.75 US in cash for each Aurora share. Aurora confirmed receiving the letters from Curaleaf but disputed the claim that they refused to engage with the offer. Aurora’s lead independent director maintained communication with Curaleaf’s CEO as of July 24, emphasizing Aurora’s commitment to executing its business plan and remaining open to ongoing dialogue.
Aurora will establish a special committee of independent directors to evaluate the proposal’s alignment with stakeholders’ interests. While emphasizing that a deal is not guaranteed, Aurora will continue its regular operations during this process. TD Cowen analysts expressed the belief that Curaleaf’s offer undervalues Aurora’s long-term potential, citing Aurora’s market leadership in medical cannabis and strong product portfolio.
Curaleaf sees the merger as an opportunity to leverage its global distribution network with Aurora’s international medical cannabis expertise. The combined revenue of the two companies exceeded $1.5 billion US over the past year, with Curaleaf anticipating annual cost synergies of $40 million US post-merger. Curaleaf views the acquisition as beneficial for both sets of shareholders, offering a diversified global platform and increased exposure to U.S. regulatory opportunities.