Brickworks (BKW) M&A Announcement summary

Deal rationale and strategic fit

• Merger creates a leading, simplified, and more investable ASX-listed company by removing a 56-year cross-shareholding, increasing liquidity, and supporting long-term growth for both shareholder groups.

• The combined entity will have a diversified portfolio, giving shareholders exposure to building products, property, private equity, and credit.

• Both boards and independent directors unanimously recommend the merger, citing value creation, increased scale, and enduring shareholder value, subject to customary conditions.

• The merged entity will operate under a single board of eight directors and executive team, maintaining consistent governance and investment philosophy.

Financial terms and conditions

• Soul Pattinson shareholders receive 1 TopCo share per share; Brickworks shareholders receive 0.82 TopCo shares per share.

• Brickworks shareholders receive an implied value of $30.28 per share, representing premiums of 10.1% to last close, 11.9% to 1-month VWAP, and 21.9% to 3-month VWAP.

• Pro forma net asset value is AUD 13.1 billion, market cap AUD 14 billion, and free float AUD 12.6 billion.

• At least 34 million new TopCo shares will be issued, raising at least $1.25 billion, with $550 million already underwritten, to fund Brickworks debt repayment, other liabilities, and transaction costs.

• Transaction costs, including stamp duty, are estimated at around AUD 250 million.

Synergies and expected cost savings

• Merger expected to deliver NAV and net cash flow accretion per share for both sets of shareholders.

• Some cost savings expected from eliminating duplicate listing costs; no major operational synergies anticipated as management teams and operations remain unchanged.

• Shareholders gain greater diversification and financial flexibility, with access to a broader investment pipeline and potential for accelerated NAV growth.