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Highlights
- Brickworks and WHSP set to merge under $14 billion deal
- New entity to simplify structure and boost shareholder value
- Scrip-for-scrip tax relief expected for eligible investors
Two of Australia's most established companies, Washington H. Soul Pattinson (ASX:SOL) and Brickworks (ASX:BKW), are joining forces in a major $14 billion merger poised to reshape the ASX200 landscape. This strategic consolidation is designed to unlock long-term value and streamline corporate structure by eliminating the long-standing cross-shareholding between the two entities.
The merger will result in the formation of a newly capitalised ASX-listed entity—temporarily named TopCo—which will acquire both (ASX:SOL) and (ASX:BKW). After the deal closes, the merged entity will be renamed Washington H. Soul Pattinson and continue trading under the ticker (ASX:SOL).
Under the terms of the deal, WHSP shareholders will receive one TopCo share for each WHSP share, while Brickworks shareholders will receive 0.82 TopCo shares for each Brickworks share. This reflects an offer value of $30.28 per Brickworks share, based on WHSP’s last trading price of $36.93—a 10.1% premium to Brickworks’ price on 30 May 2025.
This merger is expected to result in a pro forma net asset value of $13.1 billion and a market capitalisation of $14 billion. It will also drive stronger financial metrics such as net asset value per share and net investment cash flow per share, particularly benefiting from rising demand in industrial property and housing markets amid normalising interest rates.
Both boards have unanimously endorsed the transaction. In terms of capital support, TopCo has secured $550 million in commitments for new shares, which will assist in managing WHSP’s $450 million in outstanding convertible bonds and support potential new exchangeable note issuance.
Dividends remain a key focus, making the merged group attractive among ASX dividend stocks. WHSP plans to continue its final dividend for FY25, while Brickworks shareholders are expected to receive a final dividend equal to 0.82 times WHSP’s payout, in line with the share exchange ratio.
In a win for Australian investors, the companies have confirmed that the ATO is prepared to grant scrip-for-scrip rollover relief, potentially allowing shareholders to defer capital gains tax from this merger.
With implementation targeted for the second half of 2025, this merger could significantly enhance scale, unlock synergies, and better position the newly combined business within the ASX200 index.
