Soul Patts and Brickworks Forge $14 Billion ASX Powerhouse
Washington H. Soul Pattinson and Brickworks Limited have agreed to merge, creating a $14 billion ASX-listed entity with enhanced scale, liquidity, and diversification. The deal simplifies a long-standing cross-shareholding and offers shareholders significant premiums and growth opportunities.
- Binding Combination Deed executed for $14 billion merger
- Creation of newly capitalised ASX-listed company, TopCo
- Brickworks shareholders receive up to 21.9% premium on shares
- Simplification of cross-shareholding and expanded free float
- TopCo to use new equity to reduce debt and cover transaction costs
A Strategic Union
In a landmark move, Washington H. Soul Pattinson and Company Limited (Soul Patts) and Brickworks Limited have agreed to merge, forming a newly capitalised ASX-listed company with an expected market capitalisation of approximately $14 billion. This merger, formalised through a binding Combination Deed, aims to simplify a cross-shareholding relationship that has existed for over five decades, while unlocking new growth and value creation opportunities for shareholders of both companies.
Financial Upside and Shareholder Benefits
Brickworks shareholders stand to gain an implied value of $30.28 per share, representing a premium of 10.1% to the closing price on 30 May 2025, and even higher premiums when compared to one- and three-month volume weighted average prices. The merger will broaden the shareholder base, increase liquidity, and significantly expand the free float, making the combined entity more investable.
Soul Patts shareholders will benefit from increased exposure to Brickworks’ high-quality building products and industrial property assets, including stakes in joint ventures with Goodman Group. Conversely, Brickworks shareholders will gain access to Soul Patts’ diversified portfolio, spanning private equity, credit opportunities, and listed equities, providing cyclical protection and stable cash flow.
Simplified Structure and Stronger Balance Sheet
The merger will eliminate the existing cross-shareholding, creating a simplified and well-capitalised balance sheet. TopCo, the new parent company, will issue at least 34 million new shares to fund a significant portion of Brickworks’ outstanding debt, the Soul Patts convertible bond, and transaction costs including stamp duty. This capital raising is already supported by a $550 million commitment underwritten by Aitken Mount Capital Partners.
Governance and Leadership
TopCo will be renamed Washington H. Soul Pattinson and Company Limited and will trade under the ticker SOL. Leadership will be headed by Todd Barlow, current CEO of Soul Patts, with a board comprising experienced directors including Robert Millner AO as Non-Executive Chair. Dedicated governance structures will oversee the building products division, ensuring focused management of core assets.
Conditions and Next Steps
The merger is subject to customary conditions precedent including shareholder approvals, court sanction, and regulatory clearances. Independent expert reports will assess the transaction’s merits for both sets of shareholders. The companies have committed to keeping the market informed as the process unfolds, with an indicative timetable targeting completion in the second half of 2025.
Both boards unanimously recommend the merger in the absence of a superior proposal, highlighting the strategic and financial rationale behind this transformative combination.
Bottom Line?
As the merger progresses through approvals, investors will watch closely to see how this new powerhouse reshapes the ASX landscape.
Questions in the middle?
- How will the combined entity balance its diversified portfolio to maximise shareholder returns?
- What integration challenges might arise from merging two long-established companies with distinct cultures?
- How will the market respond to the increased free float and liquidity post-merger?
