Riot Platforms Pursues Acquisition of Competitor Bitcoin Miner Bitfarms

Riot Platforms Inc., a leading cryptocurrency mining company, has announced its intention to acquire Bitfarms Ltd., another important player in the Bitcoin mining industry.

Riot has already taken a 9.25% stake in Bitfarms and plans to make a public takeover bid despite a recent rejection by the company's board.

Global Bitcoin mining giant

Riot proposed an acquisition price of $2.30 per share in cash and stock, valuing Bitfarms at approximately $950 million in equity. Benjamin Yee, CEO of Riot, emphasized the strategic importance of this merger, saying: “The combination of Bitfarms and Riot will create the world's first and largest publicly listed Bitcoin mining company, with geographically diversified operations well positioned for long-term growth.”

According to Riot, the proposed deal will Creates The world's largest Bitcoin mine, with a combined power capacity of 1 gigawatt (GW) and a mining capacity of 19.6 exahashes per second (EH/s). By the end of the year, capacity is expected to reach 1.5 GW and 52 Ihash/s.

This deal would also provide strategic and financial benefits, including enhanced growth potential and improved access to equity markets. The new entity will operate 15 facilities across the United States, Canada, Paraguay and Argentina.

Riot's strong financial position, with minimal debt, more than $700 million in cash, and 8,872 bitcoins, is a major factor in the proposed acquisition. Riot expects this will support Bitfarms' growth and provide better access to stock markets.

Riot submitted its offer to the Bitfarms board of directors on April 22, but the latter rejected it without engaging in “substantive dialogue.” According to the terms, Bitfarms shareholders will own approximately 17% of the combined company.

Riot also intends to call a special shareholder meeting to discuss the appointment of new independent directors after Bitfarms' annual meeting on May 31.

Uniform pressure after halving

The proposed acquisition comes at a critical time for the Bitcoin mining industry, which is witnessing rapid consolidation following the halving. The event, which halves Bitcoin mining rewards, poses revenue challenges for miners and has prompted major companies to look for mergers and acquisitions to enhance their competitiveness.

While larger miners like Riot have thrived post-halving with large cash reserves, smaller miners are struggling due to limited negotiating power and access to capital. For example, Stronghold Digital Mining Inc. is exploring… Strategic options, including potential sales.

Riot operates the largest Bitcoin mining facility in North America in Texas, with a capacity of 700 megawatts, and plans to build a new site with a capacity of 1 gigawatt. Despite powering 200,000 Texas homes, mining operations face risks due to Texas' extreme weather and high energy prices. Meanwhile, Bitfarms is expanding its operations globally, especially in South America, where electricity costs are lower.