Cannasouth and Eqalis have announced plans to merge in a move the New Zealand firms said would deliver better outcomes for patients.
Under the proposed 50:50 merger, the companies would combine IP, technology, research and development, innovation, manufacturing, sales and prescribing capabilities.
Cannasouth CEO Mark Lucas would continue in the role after the merger, with Eqalis CEO Greg Misson appointed chief innovation officer.
Lucas said the deal would create a more resilient business, with diversified income streams, higher margins and access to a larger capital pool to help it compete globally.
He added: “Both Cannasouth and Eqalis share the same values when it comes to delivering positive health outcomes to patients. Through collaboration, we can speed up the advancement of technology to bring medicines to market faster.
“Together, [we] will have greater ability to lead and shape the New Zealand industry and reduce costs to patients.”
Misson said the firms would jointly undertake capital raising activities to bring in around NZ$9 million “to accelerate growth and the advancement of technologies which will bring costs down for patients”.
Under the terms of the agreement, Cannasouth would buy 100% of Eqalis shares, valued at $48.4 million, with an equal value of shares issued to Eqalis shareholders at 33 cents each.