According to the press release, Altria’s investment represents an approximate 45 per cent economic and voting interest in Cronos Group with a warrant to acquire additional ownership at a price of CAD 19 (EUR 12.55) per share, exercisable over the next four years. If exercised in full today, the warrant would increase Altria’s ownership in Cronos Group to approximately 55 per cent. The aggregate exercise price for the warrant is approximately USD 1 billion, the company said.
Under the terms of the transaction, Altria nominated four directors who were recently elected to serve on Cronos Group’s seven member board: Kevin C. Crosthwaite, Jr., Murray R. Garnick, Bruce A. Gates and Bronwen Evans, the press release said.
“We’re excited to finalize our investment in Cronos Group and to support their talented team,” Howard Willard, Altria’s chairman and chief executive officer, was quoted as saying. “Cronos Group is our exclusive partner in the emerging global cannabis category and represents an exciting new growth opportunity for Altria.”
“We are delighted to close this transaction and kick-off a relationship that we expect to lead to significant growth and value creation,” Mike Gorenstein, Cronos Group’s chairman, president and chief executive officer, was quoted as saying. “Altria’s investment and the services they will provide to Cronos Group will enhance our financial resources and allow us to expand our product development and commercialization capabilities and regulatory expertise to better position Cronos Group to compete, scale and lead the rapidly growing global cannabis industry. We look forward to the many opportunities we expect this relationship to create.”