Curaleaf Holdings plans to solidify its position as the global cannabis industry leader by offering to purchase all of Aurora Cannabis’ issued and outstanding common shares, the company announced Aug. 11.
While Curaleaf is taking its acquisition proposal directly to Aurora shareholders, after company officials said attempts to engage privately with Aurora did not lead to “substantive discussions,” the company continues to urge Aurora’s board of directors to engage constructively to advance the “value-maximizing transaction” that would create the largest cannabis platform in the world.
Curaleaf’s intended takeover bid reflects a 45% premium to Aurora’s 30-day volume-weighted average price (VWAP) of US$2.75 and a 110% premium to Aurora's 30-day VWAP excluding balance sheet cash. Company officials said this would provide Aurora shareholders with the opportunity to participate in the long-term upside of a combined company that they anticipate will approach a $3 billion market capitalization.
The offer would provide Aurora shareholders with a total implied consideration of US$4 per share, comprising 0.3463 Curaleaf shares plus US$0.75 in cash for each Aurora share.
Curaleaf Board Chairman and CEO Boris Jordan said he believes the potential merger represents a win-win for both companies’ shareholders.
“We are offering Aurora shareholders a unique opportunity to participate in a more highly diversified global platform and increase their exposure to U.S. regulatory tailwinds,” he said in a press release. “By combining Curaleaf’s global distribution platform with Aurora’s leading international medical cannabis franchise and EU-GMP cultivation and manufacturing capacity, we see significant potential to unlock value through substantial cost and revenue synergies.”
The potential merger would pair Aurora’s European Union-Good Manufacturing Practices (EU-GMP) cultivation and manufacturing capacities with Curaleaf’s EU-GMP processing capabilities and international distribution network, which the company expects to accelerate patient access across Europe, Canada, Australia and New Zealand.
“This deal changes the game for both sets of shareholders,” Jordan said on X. “Aurora shareholders receive a significant premium and immediate value. Curaleaf shareholders gain a business that is immediately accretive and strategically complementary to what we have built internationally. Both end up owning a stronger global platform built for sustainable, long-term growth.”
Curaleaf officials said they made their takeover bid intentions public after Jordan sent a formal letter to Aurora Executive Chairman and CEO Miguel Martin on June 23, outlining the “proposal, its compelling strategic rationale, and Curaleaf's readiness to enter a mutual nondisclosure agreement to conduct reciprocal due diligence.”
Jordan sent a follow-up letter on July 7.
“We hope that the Aurora Board of Directors will evaluate this proposal in light of its fiduciary duties and the alternatives available to Aurora shareholders,” Jordan wrote in the follow-up letter. “Curaleaf recognizes that Aurora has made progress as an independent company; however, we believe the public markets have accordingly measured that progress, and that a combination with Curaleaf offers a more immediate and credible path to unlocking substantial value for Aurora shareholders than continued standalone execution.”
Despite the follow-up letter, Aurora was “unwilling to engage in constructive discussions,” according to Curaleaf.
Cannabis Business Times reached out to Aurora, seeking comment on the unsolicited takeover offer, but the company did not immediately respond.
“We approached Aurora privately and constructively on multiple occasions,” Jordan said. “We were very disappointed that the board refused to meaningfully engage. We will now take our proposal directly to Aurora shareholders because the premium is significant, the strategic rationale is compelling and further delay is unjustified. Curaleaf remains ready to engage constructively with Aurora’s board to advance this value-maximizing transaction, and we are prepared to move quickly toward a definitive agreement.”
Although Curaleaf has yet to commence a formal takeover bid, and the company did not assure that the proposed offer will ultimately be made, company officials believe the merger would bring significant strategic and financial advantages, including:
- Create the leading global cannabis platform: The combined company would bring together two leading multi-country operators, boast a footprint in 17 countries across Europe, North America and other emerging international markets, and a highly attractive financial profile with more than US$1.5 billion of last 12 months’ revenue and nearly US$350 million of last 12 months’ adjusted EBITDA.
- Superior manufacturing and distribution capabilities: Overall, the transaction is expected to be immediately accretive to both Curaleaf International's and the consolidated combined company's margins through greater vertical integration, enhanced control of production and supply, and the capture of value across the international cannabis supply chain. The transaction would secure Curaleaf International's supply chain by providing access to Aurora's more than 50 tons of annual EU-GMP cultivation and manufacturing capacity, including the recently acquired Safari Flower Co., complementing Curaleaf's three operational EU-GMP certified facilities in Portugal, Spain and Canada. Further, Aurora shareholders would benefit from Curaleaf's unmatched international infrastructure, including leading positions in Germany, the U.K. and Poland, as well as extensive pharmacy and clinic networks and a global supply chain spanning Europe and other key international markets.
- Unlock stronger growth and profitability: The combined company would further extend its position as the global cannabis industry leader while strengthening and solidifying its presence across Europe through a diversified, vertically integrated supply chain spanning cultivation, manufacturing, distribution and patient access. Curaleaf expects to generate at least US$40 million of annual cost synergies, while also unlocking additional value through the implementation of enhanced cultivation standards, deployment of Curaleaf's leading genetics portfolio across Aurora's facilities, and optimization of cultivation capacity across the combined footprint. These initiatives, together with the companies' complementary assets and market positions, are expected to drive long-term revenue acceleration and margin expansion.
- Access to the world’s largest cannabis market: Aurora shareholders would immediately gain exposure to the U.S. market, which currently generates roughly $32 billion in legal annual sales (as per BDSA). As the U.S. cannabis industry enters a period of potentially transformative regulatory and industry catalysts, including the potential rescheduling of cannabis at the federal level and the continued expansion of legal markets through state-led medical and adult-use legalization initiatives, Curaleaf believes the U.S. presents a significant long-term growth opportunity in the global cannabis sector. With leading positions across key states and in several product categories, a portfolio of established brands, and scaled operations, Curaleaf is uniquely positioned to capitalize on an expanding addressable market, evolving regulatory framework and increasing consumer adoption.
- Enhanced scale, liquidity and access to global capital markets: The combined company would be a larger, more diversified global cannabis platform with a pro forma market capitalization approaching US$3 billion, enhanced liquidity, broader investor appeal, and expanded future capital markets opportunities. As one of the largest and most diversified cannabis companies globally, the combined entity would be uniquely positioned as the premier public vehicle for blue-chip institutional and long-term investors seeking exposure to a top-tier cannabis investment opportunity.
Jordan said the international marketplace has been a key driver of Curaleaf’s growth for several years, and that the U.S. cannabis industry is at a “serious inflection point, with critical catalysts on the horizon.”
“Standards in medical cannabis are rising, not falling,” he said. “The operators who win will be the ones who can evidence true EU-GMP compliance and quality standards across the whole chain: cultivation, manufacturing, [retail], distribution. That is exactly what this combination builds.”
