HENRICO COUNTY (dpa-AFX) - Altria Group, Inc. (MO) announced Friday the completion of the acquisition of a 45 percent ownership interest in Toronto, Canada-based cannabinoid company Cronos Group Inc. (CRON, CRON.TO) for about $1.8 billion (about C$2.4 billion), following receipt of shareholder and Canadian regulatory approvals.
With the closure of this transaction, Altria has become the largest shareholder in Cronos Group.
Altria's investment represents an approximate 45% economic and voting interest in Cronos Group with a warrant to acquire additional ownership interest of 10 percent at a price of CAD $19.00 per share, exercisable over the next four years. The aggregate exercise price for the warrant is about $1.0 billion (about C$1.4 billion).
Under the terms of the transaction, Altria nominated four directors who were recently elected to serve on Cronos Group's seven member board: Kevin Crosthwaite, Jr., Murray Garnick, Bruce Gates and Bronwen Evans.
Altria expects to account for its investment in Cronos Group under the equity method of accounting. Altria will report its share of Cronos Group's results using a one-quarter lag because Cronos Group's results will not be available in time for Altria to record them in the concurrent period.
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