OTTAWA — Hexo Corp. says it will acquire cannabis competitor Zenabis Global Inc. in an all-share deal valued at $235 million.

The pot companies say shareholders of Vancouver-based Zenabis will receive 0.01772 of a Hexo common share in exchange for each Zenabis common share held.

They say that ratio is a 19 per cent premium based on the 20-day volume-weighted average price of Zenabis' and Hexo's common shares.

The companies believe the deal will help Ottawa-based Hexo access the European medical cannabis market through Zenabis' partnerships and will result in estimated annual synergies of about $20 million within one year of the agreement being complete.

Hexo will also acquire two indoor facilities and get access to a sprawling greenhouse facility, boosting its cultivation capabilities.

The companies say the deal was already unanimously approved by each board of directors, but will require the support of at least 66 per cent of Zenabis shareholders to move forward.

This report by The Canadian Press was first published Feb. 16, 2020.

Companies in this story: (TSX:HEXO)

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