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 free float and liquidity.

• The new entity, TopCo, will have a diversified portfolio across asset classes, including private equity, property, building products, and credit.

• Shareholders gain exposure to a high-quality, diversified portfolio and benefit from enhanced capital allocation and governance.

• The merger is expected to be accretive to net asset value and cash flow per share, providing cyclical protection and strong cash generation.

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

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 a 10.1% premium to last close, 11.9% to one-month VWAP, and 21.9% to three-month VWAP; implied value per share is $30.28.

• 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 to be issued, with $550 million in commitments and a total raise of at least $1.25 billion.

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

Synergies and expected cost savings

• The merger is expected to deliver NAV and cash flow accretion per share for both sets of shareholders.

• Some cost savings expected from eliminating duplicate listing costs, but synergies are not a major driver.

• Shareholders gain greater diversification, financial flexibility, and access to a broader investment pipeline.