Long-time partners Brickworks, Washington H. Soul | Australian Markets

Investment home Washington H. Soul Pattinson has secured a $14 billion deal to snap up diversified industrial group. Brickworks.

The union ends a weird decades-long cross-shareholding every company had within the different, with Soul Pattinson holding 43 per cent of Brcikworks, and the building supplies company holding 26 per cent of Soul Pattinson.

Soul Patterson chief govt and managing director Todd Barlow mentioned the deal made a lot of strategic and financial sense.

“It simplifies the structure, adds scale, and creates a more investable company,” Mr Barlow mentioned.

“In many ways Soul Patts and Brickworks have evolved together and shared in the capital stability provided by our cross-shareholding over the past 56 years.

“The cross-shareholding served an important purpose over the years by achieving diversification of earnings, promoting long-term investment decisions and creating significant long-term value for shareholders.

“However, we believe the combined business will be very well diversified and in an even stronger position to deliver enduring value for all shareholders.”

Brickworks boss Mark Ellenor mentioned the building supplies company had undergone important evolution over the previous few a long time, with the growth in worth of its property belongings and its building merchandise portfolio.

“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,” Mr Ellenor mentioned.

The union will create a new ASX-listed company, with Brickworks shareholders receiving an implied worth of $30.28 a share — a premium of 10.1 per cent to their final closing share price.

Based on the merger ratio and situation of shares, Soul Patts shareholders, Brickworks shareholders and new company shareholders will obtain about 72 per cent, 19 per cent and 9 per cent, respectively.

Soul Patts board’s lead impartial director David Baxby referred to as the deal “a pivotal step forward in a relationship that has evolved over many years”.

“The board has unanimously endorsed the merger, recognising the significant value it will unlock for shareholders of both companies,” he mentioned.

“By simplifying the cross-shareholding structure and combining our strengths, we create a larger company with greater scale and stronger long term growth potential.”

More to return.