Riot Platforms continues its takeover of rival Bitfarm Bitcoin Miner farms

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

Riot has already acquired a 9.25% stake in Bitfarms and plans to make a public takeover offer despite the company’s board’s recent refusal to do so.

Global bitcoin mining giant

Riot proposed an acquisition price of $2.30 per share in cash and stock, valuing Bitfarms’ equity at approximately $950 million. Riot Executive Chairman Benjamin Yi highlighted the strategic importance of this merger, stating: “The combination of Bitfarms and Riot would create the world’s leading and largest publicly traded Bitcoin mining company, with a geographically diversified business well positioned for long-term growth.”

According to Riot, the proposed agreement will create the world’s largest Bitcoin mine with a total capacity of 1 gigawatt (GW) and a mining efficiency of 19.6 exahashes per second (EH/s). By the end of the year, the capacity is expected to reach 1.5 GW and 52 EH/s.

This transaction would also bring strategic and financial benefits, including greater growth potential and improved access to equity markets. The new entity will operate 15 facilities in the United States, Canada, Paraguay and Argentina.

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

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

Riot also intends to convene a special shareholder meeting to discuss the appointment of new independent directors following Bitfarms’ annual meeting on May 31.

Consolidation pressure after halving

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 Bitcoin mining rewards, is creating revenue challenges for miners and has caused larger companies to seek mergers and acquisitions to increase their competitive advantage.

While larger miners like Riot have thrived post-halving with significant cash reserves, smaller miners have struggled due to limited bargaining power and access to capital. For example, Stronghold Digital Mining Inc. explores strategic options, including potential sale.

Riot operates North America’s largest Bitcoin mine in Texas, with a capacity of 700 MW, and plans to build a new 1 GW plant. Despite powering 200,000 Texas homes, the mines face risks from extreme Texas weather and rising energy prices. Meanwhile, Bitfarms is expanding its operations around the world, especially in South America, where electricity costs are lower.