Australia’s largest brick maker, Brickworks, has agreed to a multi-billion-dollar merger with investment firm Washington H. Soul Pattinson, more popularly known as Soul Patts.
The combination will create a newly-capitalised ASX-listed company – TopCo – with an expected market capitalisation of $14 billion.
Brickworks comprises four divisions – Building Products Australia, Building Products North America, Industrial Property, and Investments.
Building Products Australia includes Austral Bricks, Austral Masonry and Bristile Roofing.
Building Products North America is a brick producer in north-east of the US and includes the flagship brand of Glen-Gery.
On surplus land assets, Brickworks has developed a portfolio of property assets in conjunction with joint venture partner Goodman Group.
“Brickworks has undergone significant evolution over the past few decades, with the growth in value of its property assets and its Building Products portfolio,” Brickworks chief executive officer Mark Ellenor said. “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.”
An intertwined history
The cross-shareholding between Soul Patts and Brickworks began in 1969.
Soul Patts has a 43 percent shareholding in Brickworks and Brickworks has a 26 percent holding in Soul Patts.
Soul Patts shareholders, Brickworks shareholders and new TopCo shareholders will receive approximately 72 percent, 19 percent and 9 percent of the TopCo shares, respectively, under the proposed merger.
“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,” said Soul Patts CEO and managing director Todd Barlow, who will now lead TopCo.
“Merging Soul Patts with Brickworks makes a lot of strategic and financial sense. It simplifies the structure, adds scale, and creates a more investable company.”
Image: Supplied
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