By Timothy S. Donahue
Top Takeaways:
- Acquisition: Organigram agreed to acquire Aurora Cannabis for US$398.3 million, outbidding Curaleaf’s hostile offer.
- BAT Financing: British American Tobacco will invest US$133.1 million to help finance the transaction.
- Global Expansion: The combined business expects more than US$35.8 million in synergies and will operate five EU-GMP-certified facilities.
BAT is doubling down on cannabis, but Curaleaf isn’t invited to the party.
Organigram Global announced on November 3 that it agreed to acquire Aurora Cannabis for C$7.80 (US$5.54) per share, valuing the Canadian medical cannabis producer at approximately C$561 million (US$398.3 million).
The offer represents a 93% premium over Aurora’s unaffected August 10 share price and a 21% premium over Curaleaf Holdings’ competing hostile takeover bid, which Aurora’s board unanimously rejected.
BAT, already a major strategic shareholder in Organigram, has agreed to invest C$187.5 million in a concurrent private placement to help fund the cash portion of the acquisition.
The investment will be made through BT DE Investments Inc., BAT’s wholly owned indirect subsidiary, which will acquire approximately 141 million Organigram shares at C$1.33 per share. Any shares that would push BAT’s common-share ownership above 30% will instead be issued as non-voting convertible preferred shares.
BAT currently holds 30% of Organigram’s voting rights and has entered into an irrevocable agreement to support the acquisition and oppose competing proposals.
The transaction would significantly expand Organigram’s international cannabis operations by combining its Canadian recreational business and European presence with Aurora’s established medical cannabis network.
“This Transaction is a defining step in Organigram’s strategy to build a disciplined, global cannabis leader,” said Organigram CEO James Yamanaka. “By bringing together Aurora’s established global medical cannabis platform with our Canadian operations and growing international footprint, we are creating a larger, stronger, and more diversified company.”
The combined company would operate five EU-GMP-certified production and distribution facilities, with commercial operations across Canada, Europe, and Australia.
Organigram also recently acquired Germany’s Sanity Group, strengthening its position in Europe’s medical cannabis market. Aurora brings additional manufacturing capacity, international distribution, and established relationships with pharmacies and medical cannabis patients.
The companies identified more than C$50 million in potential synergies through consolidated distribution, procurement efficiencies, cross-selling, and manufacturing optimization.
“Combining with Organigram will accelerate Aurora’s international growth strategy by strengthening commercial execution, expanding our product and R&D capabilities, and extending our global operating network,” said Aurora Executive Chairman and CEO Miguel Martin.
Aurora shareholders may elect to receive C$7.80 in cash, 5.8626 Organigram shares, or a combination of C$3.75 in cash and 3.0431 shares, subject to proration.
Upon completion, Aurora shareholders are expected to hold approximately 35% of the combined company’s economic ownership and 42% of its voting rights.
The agreement does not end the takeover contest. On November 3, Curaleaf said its revised October 6 offer remains outstanding and that its proposal offers greater value and stronger anticipated collaborations.
Organigram and Aurora expect shareholder meetings in December, with the transaction targeted to close in January 2027, subject to shareholder, regulatory, and court approvals.
