Rumble (RUM.US) is considering buying German data center company Northern Data, valued at nearly $1.2 billion

The Zhitong Finance App learned that the US video platform and cloud service provider Rumble (RUM.US) is considering the acquisition of German data center company Northern Data AG through an all-stock transaction, valuing the latter at about 1.17 billion US dollars. The two sides said in statements last Sunday and Monday that Rumble has proposed the acquisition by exchanging each Northern Data share for 2.319 newly issued Rumble shares. This quote valued Northern Data at around $18.27 per share, a significant discount from last Friday's closing price of €23.02 ($26.81) per share. After the transaction is completed, Northern Data shareholders will hold approximately one-third of the combined company's shares.

According to the latest market capitalization calculations of the two companies, the merger will create a company worth approximately 4.5 billion US dollars. However, this valuation is a huge discount compared to the $16 billion valuation Northern Data previously sought for its combined AI cloud and data center business in the US IPO. Last year, the company discussed listing its Taiga and Ardent businesses with consultants.

Northern Data started out as a cryptocurrency mining company, then turned to providing services to businesses developing artificial intelligence tools to take advantage of the sector's huge demand for computing power. Rumble went public in 2022 and recently entered the cloud market to try to compete in an industry dominated by well-funded Silicon Valley giants. The company launched cloud services for other businesses last year.

According to the statement, Tether — a privately held digital asset company and a controlling shareholder of both companies — supported the deal. Tether invested in Northern Data at the beginning of last year and took a stake in Rumble in February of this year.

Furthermore, according to Rumble, the deal assumes Northern Data will complete the sale of its cryptocurrency mining business. Northern Data said in another statement on Monday that the company has signed a non-binding agreement with Elektron Energy LP to sell its Bitcoin mining division.