Tilray’s Merger With Aphria Closes, Creates Global Cannabis Leader

After Tilray’s (TLRY) shareholders voted in favor of the proposed merger Aphria (APHA) last Friday, the two cannabis companies announced today the completion of the transaction.

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The combined company, which will operate under the Tilray name, will be the world’s largest cannabis company, with a market capitalization of approximately $8.2 billion. The combination of Aphria and Tilray is expected to generate roughly $81 million in annual pre-tax cost savings within 18 months of the transaction’s completion. (See Tilray stock analysis on TipRanks)

The company will continue to trade on the Nasdaq Global Select Exchange under the symbol “TLRY” and will commence trading on the Toronto Stock Exchange under the symbol “TLRY” on May 5. Under the terms, Aphria shareholders receive 0.8381 of a Tilray share for each common share of Aphria. Aphria’s CEO Irwin D. Simon will lead the company.

Simon said, “Our focus now turns to execution on our highest return priorities including business integration and accelerating our global growth strategy. Covid-19 related lockdowns have presented unique challenges across Canadian and German markets. As these markets begin to re-open, Tilray is poised to strike and transform the industry with our highly scalable operational footprint, a curated portfolio of diverse medical and adult-use cannabis brands and products, a multi-continent distribution network, and a robust capital structure to fund our global expansion strategy and deliver sustained profitability and long-term value for our stakeholders.”

Last week, BofA Securities analyst Heather Balsky initiated coverage of the stock with a Buy rating and a $23.00 price target (26.2% upside potential). Balsky is bullish on the business and expects progress from the government to legalize marijuana at the federal level.

Overall, Tilray stock scores a Hold consensus rating based on 1 Buy, 8 Holds, and 1 Sell. The average analyst price target of $24.29 implies an upside potential of about 33% from current levels.