Investment house Washington H. Soul Pattinson and industrial group Brickworks Limited announced a transformative A$14 billion merger.
In a joint ASX release, the companies said the merger would lead to the creation of a new ASX-listed company named TopCo and would increase exposure for Soul Patts shareholders to Brickworks’ building and products assets.
"Merging Soul Patts with Brickworks makes a lot of strategic and financial sense," Soul Patts CEO and managing director Todd Barlow said.
"It simplifies the structure, adds scale, and creates a more investable company."
Brickworks CEO, Mark Ellenor said the company has undergone “significant evolution” over the past decades and the merger will be beneficial to the company.
"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,” he said.
TopCo will be used to cover a significant portion of the outstanding Brickworks debt as well as other liabilities and transaction costs.
Following the announcement, Soul Patts stock rose by 3.7% and Brickworks rose by 13%.
As part of the deal, Brickworks shareholders would receive an implied value of $30.28 per share and Soul Patts shareholders will receive one share of the newly formed company. 0.82 TopCo shares will be issued for every Brickworks share.
At the time of writing, Soul Patts (ASX: SOL) shares are trading at $36.93 and the market cap is $13.59 billion. Brickworks shares are trading at $27.51 and the market cap is $4.21 billion.
