Tilray's (NASDAQ:TLRY) merger with Aphria (NASDAQ:APHA) has officially closed, creating the largest weed company in the world based on revenue. The combined company will operate as Tilray, and the two firms expect it to generate $81 million in pretax cost synergies within 18 months.
Tilray closes merger with Aphria
Aphria Chairman and CEO Irwin Simon will lead the combined company and has appointed a new executive leadership team. The company has also appointed new board members and directors. Tilray CEO Brendan Kennedy joins the board.
Tilray shares will continue to trade on the NASDAQ under the symbol "TLRY" after the merger and start trading on the Toronto Stock Exchange under the symbol "TLRY" tomorrow. As of the end of April, the combined company had a market capitalization of about $8.2 billion based on the closing stock prices.
As announced previously, every Aphria shareholder will receive 0.8381 of a Tilray share tomorrow. Investors who held shares of Tilray before the transaction was completed will continue to hold their shares without any adjustment after it closes. Tilray shareholders voted in favor of the deal on Friday.
After the merger
Simon said in a press release that their focus now turns to executing on their "highest return priorities, including business integration and accelerating our global growth strategy." He noted that the COVID-related lockdowns presented unique challenges in Canada and Germany, but as those markets reopen, Tilray is ready to transform the industry.
He said the company's footprint is highly scalable, and its diverse portfolio contains medical and adult-use recreational cannabis brands and products. Tilray also has a multi-content distribution network and a strong capital structure to fund its global expansion strategy.
The combined company will have a new logo that combines Tilray's and Aphria's branding into a "design that reflects the new Company's growing portfolio of brands across cannabis-lifestyle and wellness product categories."
Tilray set to release earnings
Tilray is scheduled to release its first-quarter earnings results later this month. In the fourth quarter, it grew its revenue by 20.5% year over year to $56.6 million, driven by growth across its core businesses. Cannabis segment revenues rose 46% on the back of an acceleration in international medical sales, which were up 191%. Adult-use cannabis sales in Canada also drove the revenue increase, and medical sales in Canada jumped 26%.
Tilray stock slipped 4% in early trading on the NASDAQ after the merger was announced, while Aphria declined by nearly 5%.