Mike Gorenstein, marijuana agency Cronos Group’s founder and CEO, speaks throughout an interview in New York, U.S., September 4, 2018. REUTERS/Brendan McDermid
(Reuters) – Marlboro cigarette maker Altria Group Inc mentioned on Friday it can make investments $1.eight billion within the Canadian hashish producer Cronos Group Inc, taking a 45 % stake within the firm because it enters a quickly rising authorized marijuana trade.
Altria will purchase 146.2 million of newly issued Cronos shares at C$16.25 per share, a 16.2 % premium to the inventory’s Thursday shut on the Toronto Inventory Trade.
After the deal is closed, Altria may have the precise to appoint 4 administrators, together with one impartial, to the Cronos board.
Cronos introduced earlier this week that Altria may make a potential funding hours after Reuters reported the tobacco large was in talks to amass Cronos.
The deal features a warrant to amass further possession curiosity in Cronos at a worth of C$19 per share over the following 4 years, which may increase Altria’s stake to 55 %.
Shares of Altria have been up 1.1 % at $54.99 in premarket buying and selling.
Reporting by Uday Sampath in Bengaluru; Enhancing by Saumyadeb Chakrabarty and Shinjini Ganguli