A U.S. cannabis company, Curaleaf Holdings Inc., has made an unsolicited bid to acquire Aurora Cannabis Inc., prompting Aurora to establish a special committee to review the offer. Curaleaf aims to purchase all of Aurora’s shares, potentially creating a merged cannabis entity operating in 17 countries globally. The proposal, which values Aurora at $4 US per share plus an additional $0.75 US in cash per share, was made public after unsuccessful private negotiations with Aurora’s leadership.

In response, Aurora disclosed that it received letters from Curaleaf regarding the acquisition proposals, with only the July 7 letter detailing the financial terms. Aurora contested Curaleaf’s assertion that it had declined to engage with the offer, citing ongoing correspondence between the lead independent director and Curaleaf’s CEO.

Despite the interest from Curaleaf, Aurora emphasized that a deal is not guaranteed and will be evaluated by the special committee of independent directors to determine its alignment with stakeholders’ interests. While acknowledging Curaleaf’s interest, analysts noted that the current offer undervalues Aurora’s long-term potential, citing the company’s market leadership, product portfolio, financial strength, and regulatory capabilities.

Curaleaf expressed confidence in the merger, highlighting the synergies between its global distribution network and Aurora’s medical cannabis franchise. The combined entities have collectively generated over $1.5 billion US in revenue in the past year, with Curaleaf anticipating annual cost synergies of at least $40 million US post-acquisition. The proposed deal is seen as mutually beneficial for both sets of shareholders, offering enhanced global exposure and leveraging regulatory opportunities in the U.S. market.