(Reuters) - Constellation Brands Inc (STZ.N) said on Wednesday it would invest $4 billion (C$5.24 billion) more in Canopy Growth Corp (WEED.TO), raising its stake in the Canadian marijuana producer to 38 percent.
Bottles of the beer, Corona, a brand of Constellation Brands Inc., sit on a supermarket shelf in Los Angeles, California April 1, 2015. REUTERS/Lucy Nicholson/File Photo
The U.S.-based maker of Corona beer said it would buy 104.5 million Canopy shares at C$48.60 per share, a 51.2 percent premium to the stock’s Tuesday close.
The company, which also makes Svedka vodka, took a 10 percent stake in Canopy in October for $191 million, making it the first major wine, beer and spirits producer to invest in legal cannabis.
As part of its latest investment, Constellation will receive 139.7 million new warrants, which if exercised over the next three years would raise its ownership in Canopy to over 50 percent.
U.S listed shares of Canopy (CGC.N) rose 16.57 pct to $28.7 in premarket trading.
Constellation expects the transaction to add to its earnings in 2021 and said both companies do not plan to sell cannabis products in the U.S. market until it is allowed at all government levels.
Reporting by Uday Sampath in Bengaluru; Editing by Sai Sachin Ravikumar and Arun Koyyur
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