Simpson Thacher is representing JPMorgan Chase Bank, N.A., in connection with bridge financing of up to approximately CA$2.4 billion (approximately $1.8 billion) for Altria Group, Inc. (“Altria”) to finance its equity investment in Cronos Group Inc. (“Cronos Group”) representing a 45% equity stake in Cronos Group. The transaction is expected to close in the first half of 2019, subject to the satisfaction of customary closing conditions and applicable regulatory approvals.
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 received 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 operates a portfolio of brands which includes Peace Naturals, a global medicinal brand, and two Canadian adult-use recreational brands, COVE™ and Spinach™. Cronos Group has no U.S. operations.
Altria is the parent company of 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. and Philip Morris Capital Corporation. Altria also holds an equity investment in Anheuser-Busch InBev SA/NV. The brand portfolios of Altria’s tobacco operating companies include Marlboro, Black & Mild, Copenhagen, Skoal, MarkTen and Green Smoke.
The Simpson Thacher team includes Justin Lungstrum and Robyn Cho (Banking and Credit); Edward Tolley III, Arjun Koshal and Grady Chang (Capital Markets); Ed Chung (Corporate); Jonathan Cantor and Jasmine Hay (Tax); and Abram Ellis, Joshua Levine, Mark Skerry and Daniel Levien (Regulatory).