Soul Patts and Brickworks agree to $14b merger

Diversified investment house Washington H. Soul Pattinson and building products manufacturer Brickworks announced on Monday they have agreed to a $14 billion merger that will create a newly capitalised ASX-listed company.

The merger, announced through a binding combination deed, will see the creation of a company called TopCo with an expected market capitalisation of $14 billion, broader shareholder base and increased liquidity.

Under the proposed transaction, Soul Patts shareholders will receive one TopCo share for every Soul Patts share held, while Brickworks shareholders will receive 0.82 TopCo shares for each Brickworks share. This implies a value of $30.28 per Brickworks share, representing a 10.1 per cent premium to the closing share price.

The deal will unwind a 56-year cross-shareholding arrangement between the companies. Soul Patts currently holds a 43 per cent stake in Brickworks, while Brickworks holds 26 per cent of Soul Patts.

Soul Patts CEO Todd Barlow said the merger “makes a lot of strategic and financial sense” by simplifying the structure and creating a more investable company.

Brickworks CEO Mark Ellenor said the timing was right to combine portfolios under one investment company and become “a well-resourced and more diversified group delivering long term value”.

The merged entity will retain the Washington H. Soul Pattinson name and trade under the SOL ticker. TopCo will be led by current Soul Patts CEO Todd Barlow, with an eight-member board including representatives from both companies.

The transaction is subject to shareholder approvals, court orders and regulatory clearances, with completion expected in the second half of 2025.

Picture: credit LinkedIn