Shares of Canada-based Cronos Group Inc CRON soared higher by 25 percent Monday after Reuters reported the cannabis company could be an acquisition target.
What Happened
Cigarette maker Altria Group Inc MO is in early talks to buy Cronos as part of a strategy to diversify itself away from traditional smokers, sources close to the matter told Reuters. Cronos has yet to agree to sell itself nor can it be confirmed that any agreement can be reached.
Why It's Important
Investors shouldn't necessarily be surprised by the report. A similar report involving the cigarette maker surfaced in early October, when Canada's The Globe and Mail reported Altria was looking to buy a minority stake in rival cannabis company Aphria Inc. APHA.
Altria has also been looking to buy a large minority stake in the e-cigarette startup Juul Labs, The Wall Street Journal reported last week.
What's Next
Discussions between Altria and Cronos are expected to last a few weeks, a source told Reuters.
At time of publication, Cronos Group traded up about 18.3 percent to $10.83 per share. Altria shares were up about 1.2 percent.
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