Washington H. Soul Pattinson and Company (SOL) M&A Announcement summary

Deal rationale and strategic fit

• Merger creates a leading ASX-listed investment house with a pro forma market cap of $14 billion, diversified across multiple asset classes, and removes a 56-year cross-shareholding to simplify structure and expand liquidity.

• Shareholders gain broader exposure: Soul Patts holders to Brickworks' building products and property, Brickworks holders to Soul Patts' diversified investment portfolio.

• The merger is unanimously recommended by independent directors and both boards, subject to customary conditions and positive independent expert opinions.

• TopCo will be governed by a unified board and executive team, ensuring consistent governance and capital allocation.

• The merger is positioned as a natural evolution of a long-term relationship, enhancing diversification and long-term value.

Financial terms and conditions

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

• Implied value for Brickworks shareholders is $30.28 per share, representing premiums of 10.1% to last close, 11.9% to one-month VWAP, and 21.9% to three-month VWAP.

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

• At least 34 million new TopCo shares to be issued, raising at least $1.25 billion to cover Brickworks debt, liabilities, and transaction costs.

• Soul Patts shareholders will own ~72% of TopCo, Brickworks shareholders ~19%, and new TopCo shareholders ~9%.

Synergies and expected cost savings

• Merger delivers 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 as management and operations remain unchanged.

• Portfolio rebalancing increases exposure to private markets and property, enhancing diversification and financial flexibility.

• Shareholders benefit from cyclical protection, strong cash flow generation, and access to a robust investment pipeline.