A Transformative $14 Billion Merger

In a bold move that will reshape Australia’s industrial and investment sectors, Washington H. Soul Pattinson (ASX:SOL) and Brickworks (ASX:BKW) have agreed to a transformative merger that will create a new $14 billion ASX-listed entity. The deal will dismantle their long-standing cross-shareholding and replace it with a unified, more investable structure.

Todd Barlow, CEO of Soul Patts, says the merger is a logical step in the evolution of both businesses. “It simplifies the structure, adds scale, and creates a more investable company,” he explained.

The new entity, TopCo, will be capitalised with fresh equity and will assume the name Washington H. Soul Pattinson and Company Limited, and continue to trade under the ASX ticker SOL.

Creating Scale, Liquidity, and Opportunity

The merged company will offer increased scale and enhanced market visibility, with an expected $14 billion market capitalisation based on current share prices. With cross-shareholdings cancelled, the simplified structure is designed to improve transparency and investment appeal.

Barlow highlighted the long-term nature of the partnership: “In many ways Soul Patts and Brickworks have evolved together and shared in the capital stability provided by our cross-shareholding over the past 56 years. The cross-shareholding served an important purpose over the years by achieving diversification of earnings, promoting long-term investment decisions and creating significant long-term value for shareholders. However, we believe the combined business will be very well diversified and in an even stronger position to deliver enduring value for all shareholders.”

TopCo will offer a broader shareholder base and significantly improved free float, allowing greater access for institutional and retail investors alike.

Enhancing Value for Both Shareholder Groups

Brickworks shareholders will receive 0.82 TopCo shares for every BKW share held. Based on Soul Patts’ closing price of $36.93, this represents an implied value of $30.28 per share – equating to a 10.1% premium on the closing price on 30 May 2025, and a 21.9% premium over the three-month VWAP.

Mark Ellenor, CEO of Brickworks, noted the timing was deliberate. “Brickworks has undergone significant evolution over the past few decades, with the growth in value of its Property assets and its Building Products portfolio. The time is now right to combine with Soul Patts, bring our portfolios under one investment company, and become a well-resourced and more diversified group delivering long term value for our shareholders.”

Soul Patts shareholders will receive one TopCo share per SOL share held, maintaining continuity while gaining additional exposure to Brickworks’ assets.

TopCo Structure and Share Allocation

Following the merger, ownership of TopCo will be distributed approximately as follows:

• Soul Patts shareholders: 72%
• Brickworks shareholders: 19%
• New TopCo shareholders (via capital raising): 9%

Final ownership will be influenced by funding mechanics and potential bond conversions.

Importantly, TopCo will issue at least 34 million new shares to fund the merger—raising approximately $1.25 billion, based on current SOL pricing. Of this, $550 million is already committed through an underwritten placement led by Aitken Mount Capital Partners, ensuring strong institutional support.

Delivering Financial and Strategic Benefits

For Soul Patts shareholders, the merger offers:

• Net Asset Value (NAV) and net cashflow accretion per share
• Greater investment flexibility
• Exposure to Brickworks’ leading building products and high-quality industrial property assets
• A fully franked FY25 final dividend

Brickworks shareholders gain access to:

• A more diversified portfolio including private equity, credit, listed equities, and property
• Increased cash flow and NAV per share
• Continued dividend income with scrip-for-scrip rollover relief
• An enhanced investment pipeline

Brickworks’ Lead Independent Director, Deborah Page, sees the merger as a catalyst. “The opportunity to unwind the cross-shareholding will offer Brickworks shareholders the potential to enhance the underlying value of Brickworks’ own assets as well as participate in the diversified strategy of the merged entity.”

Governance and Implementation Timeline

The merger will proceed via two inter-conditional schemes of arrangement, subject to shareholder and regulatory approvals. Both boards have unanimously recommended the deal, in the absence of a superior proposal and subject to a favourable independent expert report.

David Baxby, Lead Independent Director at Soul Patts, says the deal reflects a shared strategic vision. “This is a pivotal step forward in a relationship that has evolved over many years through mutual investment and strategic alignment.”

With shareholder votes expected in the coming months, the proposed merger of Soul Patts and Brickworks marks a significant turning point for two of Australia’s most storied companies.