Canada: Tilray Brands Completes Acquisition of Hexo Corp.

Cannabis and beverage alcohol powerhouse, Tilray Brands, has successfully concluded its acquisition of the prominent Canadian cannabis producer, Hexo Corp., culminating in the formation of what Tilray Brands dubs "Canada's largest cannabis company by revenue."

The finalization of this acquisition marks a pivotal moment after Hexo shareholders gave their resounding approval to the deal on June 14.

The inception of this significant partnership dates back to April 2022, when Tilray and Hexo forged a "strategic alliance," leading to Tilray taking over Hexo's debt in exchange for a stake in Hexo shares.

Exactly one year later, the two companies unveiled their comprehensive acquisition agreement, priced at an aggregate of approximately USD 56 million. Under the terms of the deal, holders of Hexo's common shares have received 0.4352 Tilray shares for every Hexo share owned. To facilitate the acquisition, Tilray issued around 19.5 million common shares.

As a result of the acquisition, Hexo anticipates its common shares to be delisted from the TSX and Nasdaq exchanges in the near future, signaling its integration into the Tilray Brands umbrella as a subsidiary.

By virtue of this strategic move, Tilray Brands solidifies its preeminent position in the Canadian cannabis market. The partnership also unlocks avenues for synergizing sales, marketing, and distribution networks, bolstering Tilray's commercial presence and accelerating its market share expansion.

Anticipated cost savings surpass USD 27 million on an annualized pre-tax basis, derived from synergies across various domains, encompassing production, sales, marketing, distribution, and corporate operations. Moreover, additional benefits could emerge from streamlining packaging, procurement, freight, and logistics operations.

The completion of this acquisition ushers in a new era for Tilray Brands, reinforcing its stature as a dominant force in the cannabis sector. This transformation is poised to reshape the landscape of the Canadian cannabis market and beyond.

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