Cronos Group Inc. (NASDAQ: CRON) (TSX: CRON) (“Cronos Group” or the
“Company”) announced that at a Special Meeting held today, the
Company’s shareholders overwhelmingly approved the previously
announced strategic investment agreement with Altria Group, Inc.
(NYSE: MO) (“Altria”). Pursuant to the agreement, at closing,
Altria will make an approximately C$2.4 billion equity investment
in Cronos Group (the “Transaction”) on a private placement basis in
exchange for common shares (the “Shares”) in the capital of the
Company. Altria will also receive Warrants of Cronos Group (the
“Warrants”), that if fully exercised, would provide the Company
with an additional approximately C$1.4 billion of proceeds. The
Shares issuable to Altria will result in Altria holding an
approximately 45% ownership interest in Cronos Group (calculated on
a non-diluted basis) and exercise of the Warrants would result in
incremental ownership of 10% for a total potential ownership
position of 55%.
“We are very pleased to have received this
approval and look forward to realizing the many benefits and value
creation enabled by Cronos Group’s partnership with Altria,” said
Mike Gorenstein, CEO of Cronos Group. “Altria’s expertise and
complementary capabilities will better position Cronos Group to
support our efforts in cannabinoid innovation, as well as the
creation of differentiated products and brands across medical and
recreational channels and throughout our global network.
Of the approximately 40.18% of common shares
represented, in person or by proxy, at the special meeting of
shareholders held on February 21, 2019 to approve the Transaction
(the “Meeting”) approximately 98.46% of such common shares were
voted in favor of the resolution approving the Transaction. In
addition, each of Altria’s nominees to the board of directors of
Cronos Group (the “Board”) were elected conditional upon and
effective as of the closing of the Transaction. The detailed
results of the vote for the election of Altria’s nominees are set
out below:
Nominee |
Votes For |
% Votes For |
Votes Withheld |
% Votes Withheld |
Kevin C. Crosthwaite Jr. |
67,382,899 |
93.82% |
4,437,616 |
6.18% |
Bronwen Evans |
70,915,464 |
98.74% |
904,051 |
1.26% |
Murray R. Garnick |
67,382,289 |
93.82% |
4,438,226 |
6.18% |
Bruce A. Gates |
67,384,686 |
93.82% |
4,435,829 |
6.18% |
Upon the closing of the Transaction, the
Company’s Board will be reconstituted to consist of Jason Adler,
Kevin C. Crosthwaite Jr., Bronwen Evans, Murray R. Garnick and
Bruce A. Gates, Mike Gorenstein and James Rudyk.
Subject to the satisfaction or waiver of all the
conditions to the Transaction, including the receipt of approval
under the Investment Canada Act, the Transaction is expected to be
completed by the end of March 2019.
Details of the voting results of the Meeting
will be filed under the Company’s profile on SEDAR at www.sedar.com
and on EDGAR at www.sec.gov.
About Cronos Group
Cronos Group is a globally diversified and
vertically integrated cannabis company with a presence across five
continents. Cronos Group operates two wholly-owned Canadian
licensed producers: Peace Naturals Project Inc., which was the
first non-incumbent medical cannabis license granted by Health
Canada, and Original BC Ltd., which is based in the Okanagan
Valley, British Columbia. Cronos Group has multiple international
production and distribution platforms across five continents.
Cronos Group intends to continue to rapidly expand its global
footprint as it focuses on building an international iconic brand
portfolio and developing disruptive intellectual property. Cronos
Group is committed to building industry leading companies that
transform the perception of cannabis and responsibly elevate the
consumer experience.
About AltriaAltria's
wholly-owned subsidiaries include Philip Morris USA Inc., U.S.
Smokeless Tobacco Company LLC, John Middleton Co., Sherman Group
Holdings, LLC and its subsidiaries, Nu Mark LLC, Ste. Michelle Wine
Estates Ltd. (Ste. Michelle) and Philip Morris Capital Corporation.
Altria holds an equity investment in Anheuser-Busch InBev SA/NV (AB
InBev).
The brand portfolios of Altria's tobacco
operating companies include Marlboro®, Black & Mild®,
Copenhagen®, Skoal®, VERVE®, MarkTen® and Green Smoke®. Ste.
Michelle produces and markets premium wines sold under various
labels, including Chateau Ste. Michelle®, Columbia Crest®, 14
Hands® and Stag's Leap Wine Cellars™, and it imports and markets
Antinori®, Champagne Nicolas Feuillatte™, Torres® and Villa Maria
Estate™ products in the United States. Trademarks and service marks
related to Altria referenced in this release are the property of
Altria or its subsidiaries or are used with permission. More
information about Altria is available at altria.com and on the
Altria Investor app.
Take a closer look at Altria and its companies
on altria.com.
Follow Altria on Twitter at @AltriaNews.
Forward-Looking Statements
This news release contains "forward-looking
information" and "forward-looking statements" within the meaning of
applicable securities laws (collectively, "forward-looking
statements"), which are based on the Company’s current internal
expectations, estimates, projections, assumptions and beliefs. All
information contained herein that is not clearly historical in
nature may constitute forward-looking statements. In some cases,
forward-looking statements can be identified by the use of
forward-looking terminology such as “may”, “will”, “expect”,
“likely”, “should”, “would”, “plan”, “anticipate”, “intend”,
“potential”, “proposed”, “estimate”, “believe”, or other similar
words, expressions, phrases, including negative and grammatical
variations thereof, or statements that certain events or conditions
“may” or “will” happen, or by discussions of strategy.
Forward-looking statements include estimates, plans, expectations,
opinions, forecasts, projections, targets, guidance or other
statements that are not statements of historical fact.
Forward-looking statements are provided for the purposes of
assisting the reader in understanding our financial performance,
financial position and cash flows as at and for periods ended on
certain dates and to present information about management's current
expectations and plans relating to the future and the reader is
cautioned that such information may not be appropriate for any
other purpose. Some of the forward-looking statements contained in
this press release, include, but are not limited to, statements
with respect to: the timing and completion of the Transaction;
obtaining the applicable government and regulatory approvals of the
Transaction; the anticipated benefits of the Transaction and our
strategic relationship with Altria; including, without limitation,
our position in supporting cannabinoid innovation and creating
differentiated products and brands across medical and recreational
categories, expanding our global footprint and growing production
capacity; the composition of the Board; our business and
operations; our strategy for future growth; expanding our global
footprint, including the timing thereof; our intention to build an
international iconic brand portfolio and develop disruptive
intellectual property and our ability to build an industry leading
company that transforms the perception of cannabis and responsibly
elevates the consumer experience. No forward-looking statement can
be guaranteed and Cronos Group cannot guarantee the future
statements contained herein. Forward-looking statements are based
upon certain material assumptions that were applied in drawing a
conclusion or making a forecast or projection, including
management's perceptions of historical trends, current conditions
and expected future developments, as well as other considerations
that are believed to be appropriate in the circumstances. While we
consider these assumptions to be reasonable based on information
currently available to management, there is no assurance that such
expectations will prove to be correct. By their nature,
forward-looking statements are subject to inherent risks and
uncertainties that may be general or specific and which give rise
to the possibility that expectations, forecasts, predictions,
projections or conclusions will not prove to be accurate, that
assumptions may not be correct and that objectives, strategic goals
and priorities will not be achieved. A variety of factors,
including known and unknown risks, many of which are beyond our
control, could cause actual results to differ materially from the
forward-looking statements in this press release. Such factors
include, without limitation, those discussed in the Company's
management’s discussion and analysis for the three and nine month
periods ended September 30, 2018 and September 30, 2017, the
Company’s annual information form for the year ended December 31,
2017, and the Management Information Circular dated December 31,
2018, all of which have been filed on the Company’s profile on
SEDAR at www.sedar.com and on EDGAR at www.sec.gov. Readers are
cautioned to consider these and other factors, uncertainties and
potential events carefully and not to put undue reliance on
forward-looking statements. Forward-looking statements contained
herein are made as of the date of this press release and are based
on the beliefs, estimates, expectations and opinions of management
on the date such forward-looking statements are made. The Company
undertakes no obligation to update or revise any forward-looking
statements, whether as a result of new information, estimates or
opinions, future events or results or otherwise or to explain any
material difference between subsequent actual events and such
forward-looking statements, except as required by applicable
law.
Cronos ContactAnna Shlimak(416)
504-0004investor.relations@thecronosgroup.com
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