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By Anton Crabbe 7th June 2025

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You can read my Stock Report on BKW here…

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The merger between Brickworks (BKW) and Soul Pattinson (SOL) appears to be more of a takeover by SOL, as SOL shareholders will receive 72% of the shares in the new listed holding company, TopCo, while BKW shareholders will receive 19% of the issued TopCo shares. Following the transaction, the holding company will be renamed Washington H. Soul Pattinson and Company Limited and will trade under the ASX ticker SOL. The merged entity is expected to be valued around $14 billion, with SOL acquiring all of BKW’s assets at a 16.6% premium above BKW’s January 2025 NAV, valuing BKW around $4 billion. Post the announcement of the merger both companies market caps have increased circa by $1bn giving SOL a market cap of $14.7bn and BKW a market cap of $4.9bn at the close of trade 7^th June 2025. This indicates that the market views the merger favorably.

The merger is considered advantageous for BKW shareholders, as it provides access to the capital required to continue developing its business while relieving it of debt obligations. Also in my view, the transaction is beneficial to BKW. As it will allow them to be managed by a company like SOL, which has a long-term investment perspective. This approach is necessary for generating optimal returns from BKW’s assets. As in the current market, investors and and the like lack the patience and foresight to realise BKW’s value.

In conclusion, the merger is expected to enhance the value of both companies, with SOL’s long-term investment view providing a stable environment for BKW to thrive. The transaction is anticipated to be a positive development for both companies. And I for one look forward to being able to invest in the new entity post merger.

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