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Canadian crypto miner Hut 8 and its US rival US Bitcoin are working on a mutually beneficial merger to float a new company.
Digital asset mining platforms Hut 8 and US Bitcoin have agreed to a merger to weather the crypto downturn better. According to reports, the union between the two North American rival crypto miners looks to consolidate resources following a steep decline in crypto sector valuations.
Canada-based Hut 8 announced the approval of a ‘definitive business combination agreement’ between the boards of both companies towards the merger. The new company, called Hut 8 Corp, or “New Hut,” will become a United States-based venture, with Hut 8 and US Bitcoin becoming its subsidiaries. In addition, existing shareholders would collectively own 50% of the newly merged company.
New Hut would also see a dual listing on the Nasdaq and the Toronto Stock Exchanges following the deal’s completion.
Hut 8, US Bitcoin Executives Comment on Planned Merger
Speaking on the upcoming merger, which requires regulatory approval by authorities in the US and Canada, Hut 8 CEO Jaime Leverton said:
“Bringing together Hut 8’s operational track record and diversified revenue streams with US Bitcoin’s scalable mining sites, sizeable hosting business, and industry-leading managed infrastructure operations not only accelerates our diversified strategy and positions us for near-term growth but also establishes us as a strong, U.S.-based player that is ready and able to seize additional opportunities as they arise.”
Leverton also said that the merger allows Hut 8 to leverage all of the BTC it has HODLed to date. He further added that the Canadian crypto miner intends to cover operating costs in the interim by selling the Bitcoin it mines. In addition, Hut 8 plans to sell BTC from its existing stack and explore various debt options.
The merger would see Hut 8 gain access to hundreds of megawatts of cheap energy while US Bitcoin gains a partner with a sound balance sheet. Furthermore, New Hut would enjoy access to capital resources across six facilities for crypto mining and other operations. These facilities include five sites in New York and Canada’s Alberta province, with the newly formed company earning a market capitalization of $990 million.
Weighing in on the merger, US Bitcoin co-founder and chief executive officer Michael Ho enthused:
“We’ve been searching for the right partner to join us on our ambitious growth journey for some time and are confident that Hut 8 is the perfect fit.”
Subject to definitive loan documentation completion, Hut 8 would provide a $6.5 million secured bridge financing to US Bitcoin.
Other Crypto Company Mergers on Horizon?
The Hut 8-US Bitcoin merger represents one of the most significant in the struggling crypto space. However, such business consolidation of resources may not be the last as digital asset companies look to remain competitive. For instance, another Canada-based crypto firm, WonderFi, announced in January that it was considering a merger with Coinsquare.
According to reports, WonderFi, backed by crypto investor and billionaire Kevin O’Leary, wants to create a Canadian crypto powerhouse.