Hut 8 and US Bitcoin to merge into new Hut 8 Corp.

North American mining companies Hut 8 and US Bitcoin have announced a merger on an equal basis. The new entity, named Hut 8 Corp, will be based in the United States.

🔔🔔🔔News: Hut 8 and US Bitcoin Corp have announced a merger of equals, expecting to establish a new Hut 8 as a large-scale publicly traded North American Bitcoin miner with diversified fiat revenue streams. 📰Read more: https://t.co/TL0ZHpkKqu 📰

— Hut 8 (@Hut8Mining) February 7, 2023

According to the press release, the merged entity will own a hash rate of 5.6 EH/s with access to 825 MW of capacity across six sites.

“We were initially attracted by Hut 8’s solid reputation, excellent financial management across all market cycles, and diversification of revenue sources. Because of this, we determined that the strategic impact would be significant: we see a clear path to realising our joint mission to advance innovative technologies and become a leading mining operator,” said co‑founder and CEO of US Bitcoin, Michael Ho.

The merger is expected to receive court, regulatory, and subsequently shareholder approvals. It is expected to occur in Q2 2023.

Under the arrangement, Hut 8 agreed to provide the partner with bridge financing in the range of $6–6.5 million for a transitional period. Jamie Leverton, head of the Canadian firm, said that these funds will be drawn from accumulated Bitcoin reserves.

Hut 8 trades on Nasdaq and the Toronto Stock Exchange. The listing of the merged company on the platforms will require approval. Under the terms of the agreement, as a result of the share exchange, the existing shareholders of both firms will jointly own 50% of Hut 8 Corp.

At the time of writing, the Canadian company’s quotes on the U.S. exchange had fallen from $2.42 at the opening to $2.21 — a 7.14% decline.

Hut 8 is involved in a legal battle against the electricity supplier Validus Power Corp and its subsidiary.