Innovation Beverage Strikes Deal to Merge Into BlockFuel Energy

By Robb M. Stewart

Australian drinks company Innovation Beverage will merge into Texas oil-and-gas explorer BlockFuel Energy, building a company with an estimated equity valuation of between $220 million and $343 million.

Innovation Beverage, which manufactures and exports a number of alcoholic and non-alcoholic drinks, including Australian Bitters, said Tuesday it has signed a nonbinding letter of intent to buy BlockFuel in a deal that will be structured as a reverse triangular merger.

The Nasdaq-listed company also plans a five-for-one reverse stock split, which will be effective Friday.

Innovation Beverage's shares soared ahead of the opening bell, rallying almost 250%. The shares last closed at 37 cents, down 66% so far in 2025.

Under the terms of deal, a newly formed subsidiary of Sydney-based Innovation Beverage, will merge with BlockFuel. BlockFuel will emerge as the surviving entity, and its owners will receive the stock equal to 90% of Innovation Beverage's issued and outstanding shares.

BlockFuel President and Chief Executive Daniel Lanskey is expected to be appointed chairman and CEO of Innovation Beverage, while Innovation Beverage's current chairman and CEO, Sahil Beri, is set to become president of a newly formed Australian beverage subsidiary.

Innovation Beverage said its shareholders will own 10% of the combined entity when the deal closes, equal to a post-transaction equity value for IBG in the range of $22 million to $34.3 million. That compares with a pre-transaction valuation of $2.9 million to $6.3 million.

Lanskey said the combined company will bring together BlockFuel's technology for turning natural gas at its source, including stranded or flared gas, into a potent resource with access to public markets as the company seeks to capture opportunities in both cleaner energy and digital assets. BlockFuel is looking to combine oil and gas exploration with power generation to power bitcoin mining operations and data centers in North America.

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

(END) Dow Jones Newswires

September 23, 2025 09:09 ET (13:09 GMT)