Liquor giant Constellation stopped being all about Heinken the minute it found out that the real money might be in the plants.
After already putting money behind cannabis company Canopy, Constellation decided to up the ante and increase their investment. Now, Canopy is $3.5 billion dollars richer.
Per MJBizDaily
Constellation will acquire 104.5 million shares directly from Canopy Growth for CA$48.60 per share, giving the New York-based company – which owns, distributes and markets 100 beer, wine and spirits brands, including Corona and Robert Mondavi – 38% ownership after existing warrants are exercised.
The move also involves Wall Street giants Goldman Sachs and Bank of America Merrill Lynch. Goldman advised Constellation; Bank of America Merrill Lynch is providing the financing for the transaction.
It is the largest investment in any cannabis company to date and will “immediately” put CA$5 billion in the bank for Ontario-based Canopy after the deal closes, the company said in a statement.
Constellation also will receive 139.7 million new warrants, which, if exercised, would increase its ownership in Canopy to more than 50% and provide at least an additional CA$4.5 billion for the diversified marijuana company.
Canopy said it plans to use the cash to build and acquire key assets to establish global scale in the nearly 30 countries pursuing a federal medical cannabis program.
The money will not be invested in additional cannabis cultivation assets in Canada, Canopy said.
In a conference call Wednesday morning, CEO Bruce Linton called the deal “rocket fuel” for Canopy’s international plans.
Constellation will get four directors on Canopy’s seven-member board.
Constellation – one of the biggest alcohol businesses in the world – first entered into a strategic relationship with Canopy last October with a CA$245 million, 9.9% investment in Smiths Falls-based Canopy.
Read more about their record-setting investment here