Constellation Brands has signed a deal to invest $5-billion in Canopy Growth Corp. to increase its stake in the marijuana company to 38 per cent and make it its exclusive global cannabis partner.
Under the agreement, Constellation, a global producer of beer, wine and spirits, will acquire 104.5 million Canopy shares at a price of $48.60 per share.
Canopy shares surged more than 30 per cent in the first minutes of trading Wednesday in Toronto..
“We look forward to supporting Canopy as they extend their recognized global leadership position in the medical and recreational cannabis space.”
The investment follows a deal last year that saw Constellation acquire a nearly 10 per cent stake in Canopy for $245-million.
The agreement Wednesday will see Constellation nominate four directors to Canopy Growth’s seven-member board of directors.
Constellation is also receiving 139.7 million new warrants, which are exercisable over the next three years. If Constellation exercises all of its existing and new warrants, its ownership in Canopy would exceed 50 per cent.
“Our business can now make the strategic investments required to accelerate our market position globally,” Canopy chairman and co-chief executive Bruce Linton said in a statement. [Read more @ The Globe and Mail]