CoreWeave Buys Core Scientific In $9 Billion All-Stock Deal

Artificial intelligence (A.I.) cloud infrastructure company CoreWeave (CRWV) is acquiring data centre infrastructure provider Core Scientific (CORZ) in an all-stock deal worth $9 billion U.S.The takeover of Core Scientific had been rumoured and reported on since June of this year.Shareholders of Core Scientific will receive 0.1235 CoreWeave shares for each share they currently hold. That implies a $20.40 U.S. per share valuation and a 66% premium to Core Scientific’s closing stock price before deal talks were first reported on a month ago.After the deal closes, Core Scientific shareholders will own less than 10% of the combined company.This is the second time that CoreWeave has made a bid for Core Scientific. Last year, Core Scientific rejected CoreWeave’s unsolicited takeover offer to buy all its outstanding shares.CoreWeave says the acquisition will eliminate $10 billion U.S. in future lease obligations and significantly enhance its operating efficiency.The transaction is expected to close by year’s end, pending regulatory and shareholder approval.The deal expands CoreWeave’s access to power and real estate, giving it ownership of 1.3 gigawatts of gross capacity across Core Scientific’s U.S. data centres, with an additional gigawatt available for future growth.CoreWeave said it is still deciding whether to divest Core Scientific’s cryptocurrency mining business, which was responsible for 89% of Core Scientific’s first-quarter revenue.CoreWeave said it may reconfigure Core Scientific and get it focused on handling A.I. workloads rather than Bitcoin (BTC) mining. Core Scientific employs more than 300 people. It has worked with CoreWeave on-and-off since 2018.CoreWeave went public in March of this year, and its shares have risen 299% since then to currently trade at $159.70 U.S. each.