Tilray shares were soaring on Wednesday after Wall Street found out that the firm would merge with Aphria to create the world’s biggest cannabis company.

The stock soared as much as 27.2% on the news while shares of Aphria gained as much as 6.8%.

As part of the deal, Aphria shareholders will receive 0.8381 shares of Tilray for each Aphria share they hold. The combined company will have a valuation of about $3.9 billion, and industry-leading revenue of $685 million over the last 12 months.

According to a press release, the combined company will be led by a best-in-class management team and board of directors, with strong track records in consumer-packaged goods and cannabis experience internationally.

Upon completion of the arrangement, Aphria’s current Chairman and CEO, Irwin D. Simon, will lead the combined company in the same roles.

“This is an exciting day for both companies including our 2,500 employees, for the cannabis industry, and for patients and consumers around the world. We are bringing together two world-class companies that share a culture of innovation, brand development, and cultivation to enhance our Canadian, U.S. and international scale as we pursue opportunities for accelerated growth with the strength and flexibility of our balance sheet and access to capital,” said Mr. Simon.

He added, “Our highly complementary businesses create a combined company with a leading branded product portfolio, including the most comprehensive Cannabis 2.0 product offerings for patients and consumers, along with significant synergies across our operations in Canada, Europe, and the United States. Our business combination with Tilray aligns with our strategic focus and emphasis on our highest return priorities as we strive to generate value for all stakeholders.”

Mr. Simon further stated, “I am honored to work with Brendan Kennedy, a pioneer in the cannabis industry, and the Tilray team as they join forces with our talented employees at Aphria. I look forward to leading the talented teams of both Aphria and Tilray as we seek to create a leading global cannabis and consumer packaged good company with a portfolio of medical, wellness, and adult-use brands consumers love.”

Kennedy, who is the CEO of Tilray, commented, “We are thrilled to bring together two cannabis indsutry leaders. At this nascent stage of development and expansion of the global cannabis market, we believe companies with leading geographical scale, product range and brand expertise are most likely to benefit long-term. By leveraging our combined strengths and capabilities, we expect to be able to meet the needs of consumers more effectively all over the world and advance patient care. With a strong financial profile, low-cost production, leading brands, distribution network and unique partnerships, we believe the combined company will be well-positioned to deliver sustainable, attractive returns for stocholders. I look forward to working with Irwin and the combined company’s management team to make our consumer products more accessible around the world.”

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.

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