Aphria Inc. and Tilray Inc. confirmed early Wednesday they have agreed to join forces in a blockbuster deal uniting two of the biggest names in the legal cannabis industry. The announcement follows BNN Bloomberg’s reporting Tuesday afternoon that the two sides were in advanced negotiations.

Under the terms of the agreement, each Aphria share will be exchanged for 0.8381 of a Tilray share, while Tilray shareholders will retain their existing shares. As a result of the exchange ratio, Aphria shareholders will own 62 per cent of the combined company’s common shares.

The terms are in line with what BNN Bloomberg reported Tuesday. Likewise, the companies confirmed that they would operate under the Tilray name after the deal closes, and said the company will retain the TLRY ticker symbol on the Nasdaq.

According to the release Wednesday, Aphria Chief Executive Office Irwin Simon will lead the combined company as chairman and CEO. The combined company’s board of directors will include nine positions, with seven being occupied by Aphria appointees. Current Tilray CEO Brendan Kennedy will occupy one of the other two seats.

That balance of power reflects the advance reporting by BNN Bloomberg, which indicated Aphria would control the combined entity.

“We are bringing together two world-class companies that share a culture of innovation, brand development and cultivation to enhance our Canadian, U.S., and international scale as we pursue opportunities for accelerated growth with the strength and flexibility of our balance sheet and access to capital,” Simon said in the release.

The arrangement creates a new industry powerhouse, with combined revenue of $874 million over the last 12 months. The two companies confirmed Wednesday they’re aiming for $100 million in annual cost savings, which they said helps provide “a robust platform for future profitability.”

The deal, which is expected close in the second quarter of next year, is subject to standard closing requirements, including approval by at least two-thirds of votes cast by Aphria shareholders at a future special meeting. Tilray shareholders, meanwhile, will have to vote on the planned share issuance to complete the deal. The arrangement includes a $65-million reciprocal break fee if either side walks away from the deal.

The two companies said they’ll need to seek regulatory approvals in Canada, the U.S. and Germany.

Cowen served as financial advisor to Tilray on the tie-up, while Jefferies LLC advised Aphria.