Canada’s second-largest licensed producer of medical pot, Aurora Cannabis Inc., will acquire Canada’s oldest producer, CanniMed Therapeutics Inc., in the

Canada’s second-largest licensed producer of medical pot, Aurora Cannabis Inc., will acquire Canada’s oldest producer, CanniMed Therapeutics Inc., in the biggest deal the Canadian cannabis industry has ever seen.

Following months of hostility between the two companies, Aurora announced Wednesday (January 24) that it had struck a friendly deal with CanniMed: It would acquire the Saskatoon-based producer for $1.1 billion in shares and cash.

Aurora made its first move on November 14, 2017, when the firm announced that it had submitted a proposal to CanniMed’s board of directors requesting to buy up all of its issued and outstanding common shares, valued at $24 per share.

Three days later, CanniMed said it had reached a deal with another Canadian licensed producer, and would acquire Newstrike Resources Ltd, whose shareholders would later vote in favour of a CanniMed takeover.

But on November 24, Aurora said it was planning an unsolicited takeover of CanniMed, and offered to purchase its outstanding common shares on the condition that the Newstrike transaction be terminated.

After adopting a shareholder rights plan in December that prevented Aurora from acquiring additional stocks and filing a lawsuit against the firm in January alleging ‘multiple claims of wrongdoing’, CanniMed agreed to the $1.1-billion after entering talks with Aurora executives last week.

‘We are very pleased to have come to terms with CanniMed on this powerful strategic combination that will establish a best-in-class cannabis company with operations across Canada and around the world,’ said Terry Booth, CEO of Aurora in a news release.

CanniMed CEO Brent Zettl added that the hard-fought deal was ‘a testament to the great team at CanniMed’, and confirmation that the company has been successful in its various global dealings in medical cannabis.

Wednesday’s agreement will see CanniMed shareholders receiving 3.4 Aurora shares, or a combination of cash and shares, for every CanniMed share they hold.

With Aurora’s implied share price of $12.65 and the 3.4 exchange rate, the new offer would put the price of each share at $43, a 181-percent premium over the closing price of CanniMed shares when Aurora first proposed a deal in November.

But with CanniMed’s shares shooting up 17 percent on Wednesday, it’s not unlikely that the value of the deal could change.

After agreeing to the friendly deal with Aurora, CanniMed has said it will no longer acquire Newstrike. It will pay the company a $9.5-million break fee.

The deal is still subject to conditions, including Canadian Competition Act approval.