By Robb M. Stewart


Hut 8 Mining Corp. shares fell Tuesday after the crypto-currency miner struck an all-stock deal that will see it tie-up with U.S. Data Mining Group Inc., building scale in North America in the wake of last year's sharp drop in crytocurrency prices.

In midday trading, Hut 8's shares were 8.6% lower at C$2.92 in Toronto, eating into a strong rebound in recent weeks and leaving them down more than 65% over the last 12 months.

The Canadian company said a merger with U.S. Data Mining, which does business as US Bitcoin Corp., would create a U.S.-based company with a combined market value of roughly $990 million and access to about 825 megawatts of gross energy across six sites with self-mining, hosting and managed infrastructure operations.

Under the terms of the agreement between the companies, existing shareholders in the two companies will collectively own 50% each of the combined company, which will be named Hut 8 Corp. Hut 8's shareholders will receive 0.2 of a share of the new company for each of their shares, while U.S. Data Mining shareholders will each get 0.6716 of a share of the new company for each share, the companies said.

The combined company, which will be listed on the Toronto Stock Exchange and Nasdaq Stock Market, will have a balance sheet offering greater financial flexibility to grow and invest in new opportunities, the companies said. And the increased scale and U.S. headquarters are expected to lead to inclusion in new indexes and offer improved access to capital, they said.


Write to Robb M. Stewart at robb.stewart@wsj.com


(END) Dow Jones Newswires

02-07-23 1237ET