Soul Patts and Brickworks Announce $9 Billion Merger, Shares Surge
Deal News | Jun 02, 2025 | EIN
In a significant move in the Australian market, Washington H. Soul Pattinson, commonly known as Soul Patts, and its affiliate Brickworks have announced a $9 billion merger. Both companies experienced substantial stock surges following the announcement, with Soul Patts' shares increasing by 13.78% and Brickworks' by 22.32% as of early afternoon trading. The merger will consolidate the companies' holdings across various sectors including real estate, private equity, and credit, worth A$13.1 billion in total. This strategic merger seeks to simplify the companies' structure and enhance investability, unwinding a 56-year-old mutual cross-holding arrangement. This structure was originally formed to thwart hostile takeovers and support long-term investment strategies. Analysts, including Hugh Dive from Atlas Funds, have previously criticized the structure for its complexity and for causing the companies to trade at a discount. The merger involves a structured buyout with Brickworks shareholders expecting a premium above closing prices. Pitt Capital Partners and Citigroup Global Markets Australia are advising the companies in this merger, which follows earlier failed efforts to dismantle the cross-shareholding.
Sectors
- Investment and Financial Services
- Building Materials
- Corporate Finance and Advisory
Geography
- Australia – The companies involved, Washington H. Soul Pattinson and Brickworks, are based in Australia, and the stock market reaction took place on the Australian Securities Exchange.
Industry
- Investment and Financial Services – The merger involves Washington H. Soul Pattinson, an investment firm, highlighting relevance to the financial services industry.
- Building Materials – Brickworks, Australia's largest brickmaker, underscores the involvement of the building materials sector.
- Corporate Finance and Advisory – Advisers such as Pitt Capital Partners and Citigroup Global Markets Australia indicate the participation of corporate finance and advisory services.
Financials
- $9 billion – Total value of the merger deal between Soul Patts and Brickworks.
- A$14 billion – Equivalent total in Australian dollars for the merger.
- A$13.1 billion – Value of combined holdings across real estate, private equity, and credit managed by the new entity.
- 13.78% – Rise in shares of Soul Pattinson following the announcement.
- 22.32% – Increase in shares of Brickworks after the merger news.
- A$30.28 per share – Implied value per Brickworks share representing a premium over the stock's closing price.
Participants
| Name | Role | Type | Description |
|---|---|---|---|
| Washington H. Soul Pattinson | Target Company | Company | Australian investment firm involved in the merger with Brickworks. |
| Brickworks | Target Company | Company | Australia's largest brickmaker involved in the merger with Soul Patts. |
| Pitt Capital Partners | Adviser | Company | Acting as adviser to Soul Pattinson in the merger deal. |
| Citigroup Global Markets Australia | Adviser | Company | Advising Brickworks in the merger transaction. |
| Perpetual Investment Management | Other Company | Company | Previously attempted to unwind the cross-shareholding between Soul Patts and Brickworks. |
| Mark Carnegie | Other Company | Person | Venture capitalist involved in past efforts to alter the structure between Soul Patts and Brickworks. |