Soul Pattinson and Brickworks Announce $14B Merger to Form ASX Industrial Giant

About Washington H. Soul Pattinson

Washington H. Soul Pattinson (ASX: SOL) is one of Australia’s oldest listed investment companies. It applies a disciplined, long-term approach to capital growth and steadily rising dividends via six core portfolios including Strategic Investments (board-level stakes in uncorrelated listed companies); Large Caps (actively managed, Australian large-cap equities); Emerging Companies (pre-IPO and small-cap positions), Private Equity (unlisted growth companies); Credit (corporate loans, bonds and structured credit); and Property (direct property holdings and development joint ventures).

Its diversified holdings span over 200 private, public and real assets—ranging from major listed names like TPG Telecom and New Hope Corporation to credit instruments and direct real estate ventures—overseen by a compact Sydney-based investment team that has never missed a dividend since the 1903 listing.

Brickworks

Brickworks (ASX: BKW) is a leading building-materials manufacturer and diversified property/investment group established in 1934. Its business is organised into four divisions, the first being Building Products Australia, it’s involved in clay bricks, pavers, masonry blocks, concrete and terracotta roof tiles under brands such as Austral Bricks, Bristile Roofing, Bowral Bricks, UrbanStone and Terracade.

Another division is Building Products North America, premium brick and masonry such as Glen-Gery, Sioux City Brick and Cushwa Brick. The third division is Property, development and ownership of surplus land through joint-venture trusts, notably the $5 billion Industrial JV Trust with Goodman Group.

And finally their last division is Investments, strategic stakes in listed companies. With over 30 manufacturing plants across Australia and North America, Brickworks leverages its scale and brand portfolio to deliver diversified, long-term earnings

A Strategic Vision for Growth

The merger, valued at approximately $14 billion, will create a newly capitalised ASX-listed company (TopCo), broadly unifying decades of cross-investment into a streamlined, more investable entity.

The newly announced deal is not just a new financial transaction, both companies have a long history of interconnected investment and strategic alignment, and this merger signifies the culmination of an evolving relationship built over more than 50 years. The merger is unanimously recommended by the Soul Patts Board of Directors and the Independent Directors of Brickworks.

By eliminating the cross-shareholding structure that once provided financial stability through diversification, the combined entity is poised to unlock enhanced operational flexibility.

The integration is expected to deliver a broader shareholder base, improved liquidity, and stronger prospects for long term capital growth while retaining the long-term dividend-yielding tradition that has made both names household brands on the ASX.

Transaction Structure and Shareholder Impact

The merger will be implemented through two inter dependent schemes of arrangement. Under the terms of the Combination Deed, Brickworks shareholders will receive an implied value of approximately $30.28 per share, while the share exchange ratios are structured so that the final capital structure of the new company will allocate roughly 72% to Soul Pattinson shareholders, 19% to Brickworks shareholders, and 9% to newly issued TopCo shareholders.

The implied value represents a 10.1% premium to the Brickworks closing share price, an 11.9% premium to the 1-month VWAP, a 21.9% premium to the 3-month VWAP, and a 16.6% premium to post-tax Net Asset Value.

This carefully calibrated balance reflects the relative values and growth prospects of each business, ensuring that both legacy shareholder groups are positioned to benefit from increased scale and a more diversified portfolio of high quality assets.

Robust Legal Framework and Regulatory Milestones

The comprehensive documentation accompanying the merger lays out the extensive legal, regulatory, and operational groundwork necessary for the smooth implementation of the deal. The Combination Deed, along with detailed schemes of arrangement and accompanying deeds poll, establishes a clear roadmap for the transaction. Success of the merger is subject to customary conditions precedent, including requisite shareholder approvals, court orders under section 411 of the Corporations Act, and various regulatory authorisations.

In addition, the new entity must secure proper listings on the ASX, ensuring that trading in the combined company begins on a sound and viable settlement basis.

Creating a Diversified Industrial Powerhouse

The merger unites Brickworks’ high quality assets in building products and property with Soul Pattinson’s diversified investment portfolio, which spans private equity, credit, and other asset classes. This union is expected to deliver strategic benefits by combining Brickworks’ operational expertise and market presence with Soul Pattinson’s extensive investment acumen.

The new company will benefit from a simplified balance sheet and enhanced financial flexibility, positioning it to better navigate cyclical market trends while driving sustainable long term value for its shareholders.

Market Outlook and Next Steps

With both boards fully endorsing the merger and independent expert reports expected to further cement the deal’s merits, investor sentiment appears cautiously optimistic. The transaction now moves into its final approval stages, with the forthcoming shareholder meetings and court hearings set to validate the merger’s strategic rationale.

As the implementation timetable unfolds in the coming months, market participants will closely watch the integration process and its potential to set new benchmarks in capital efficiency and diversified asset management.

A New Era for Australian Capital Markets

By converging two iconic institutions with storied track records, the merger of Soul Pattinson and Brickworks heralds the start of a new era in Australian finance and industry. The new entity—trading under the established ticker of Washington H. Soul Pattinson—will not only create a stronger, more resilient corporate structure but also provide a platform for future innovation and value creation.

As regulatory approvals fall into place and integration efforts get underway, this transformative deal is poised to leave an indelible mark on the nation’s capital markets and the competitive dynamics among Australia’s leading industrial and investment groups.

As the final stages approach, stakeholders and market observers alike will be keenly focused on how the combined strengths of diversified asset management and robust industrial operations translate into enhanced shareholder value and lasting competitiveness in an ever-evolving global economic environment.