Riot Platforms Inc. has announced its intention to acquire Bitfarms Ltd., a move that would create the world's largest publicly listed Bitcoin miner. Despite Bitfarms' board rejecting Riot's initial $950 million acquisition offer, Riot has acquired a 9.25% stake in the company and plans to make a public takeover offer.

Riot's proposed acquisition price of $2.30 per share in cash and stock values Bitfarms at approximately $950 million in equity. The merged entity would have a combined power capacity of 1 gigawatt (GW) and a mining capacity of 19.6 exahashes per second (EH/s), making it the premier Bitcoin miner globally. By the end of the year, the capacity is projected to reach 1.5 GW and 52 EH/s, cementing its position as a global leader in the industry.

The strategic benefits of this merger are clear. A combination of Bitfarms and Riot would offer enhanced growth potential, better access to equity markets, and a geographically diversified operation with 15 facilities across the US, Canada, Paraguay, and Argentina. Riot's strong financial standing, with minimal debt, over $700 million in cash, and 8,872 Bitcoin, would support Bitfarms' growth and provide a solid foundation for the merged company.

The proposed acquisition comes at a critical time for the Bitcoin mining industry, which is experiencing rapid consolidation following the halving. The event, which halves the rewards for mining Bitcoin, poses revenue challenges for miners and has caused larger companies to seek mergers and acquisitions to enhance their competitive edge. While larger miners like Riot have thrived post-halving with substantial cash reserves, smaller miners struggle due to limited negotiating power and capital access.

Riot's move to acquire Bitfarms is a bold one, and the company's Executive Chairman, Benjamin Yi, emphasized the strategic importance of this merger. "A combination of Bitfarms and Riot would create the premier and largest publicly listed Bitcoin miner globally, with geographically diversified operations well-positioned for long-term growth," Yi stated.

Despite Bitfarms' board rejecting the initial offer, Riot remains committed to the acquisition and has submitted a proposal to call for a special shareholder meeting to discuss the appointment of new independent directors following Bitfarms' annual meeting on May 31. Bitfarms shareholders would hold approximately 17% of the merged company, ensuring their interests are represented in the new entity.

As the Bitcoin mining industry continues to evolve, consolidation and strategic partnerships will play a crucial role in shaping its future. Riot's proposed acquisition of Bitfarms is a significant development in this landscape, and its success could pave the way for further mergers and acquisitions in the industry. With its strong financial standing and commitment to growth, Riot is well-positioned to lead the charge in this new era of Bitcoin mining.