Two Equal Signs in One Line?

Could someone please explain what this does and how it is legal C code? I found this line in this code: http://code.google.com/p/compression-code/downloads/list, which is a C implementation of the Vitter algorithm for Adaptive Huffman Coding

ArcChar = ArcBit = 0;

From the function:

void arc_put1 (unsigned bit)
{
    ArcChar <<= 1;

    if( bit )
        ArcChar |= 1;

    if( ++ArcBit < 8 )
        return;

    putc (ArcChar, Out);
    ArcChar = ArcBit = 0;
}

ArcChar is an int and ArcBit is an unsigned char