Brickworks Limited shareholders convened on 10 September 2025 to vote on a landmark merger with Washington H. Soul Pattinson, creating a new ASX-listed entity, Topco. The deal promises streamlined ownership and enhanced growth prospects.
- Proposed merger to create Topco, a new ASX-listed company
- Shareholders to exchange Brickworks and Soul Pattinson shares for Topco shares
- Independent Directors unanimously recommend approval
- Independent Expert deems the scheme fair and reasonable
- Deal aims to eliminate cross shareholding and raise $1.4 billion capital
A Historic Vote for Brickworks Shareholders
On 10 September 2025, Brickworks Limited shareholders gathered to consider a transformative proposal, a combination with Washington H. Soul Pattinson and Company Limited (Soul Patts) under a newly formed ASX-listed entity dubbed Topco. This merger, structured as a scheme of arrangement, would consolidate the two companies’ shares into Topco shares, effectively ending a cross shareholding relationship that has existed since 1969.
Rationale Behind the Combination
The cross shareholding between Brickworks and Soul Patts historically diversified earnings and delivered consistent shareholder returns. However, Brickworks’ Independent Directors concluded that the time is ripe to simplify the corporate structure and unlock greater value through scale and streamlined governance. The merger is expected to create a combined market capitalization of approximately $16.9 billion, with Brickworks shareholders receiving 0.82 Topco shares for each Brickworks share held.
Strong Endorsements and Conditions
The Independent Board Committee, led by Chair Deborah Page, unanimously recommended shareholders vote in favor of the scheme. This endorsement is bolstered by an Independent Expert report from Kroll Australia Pty Ltd, which found the scheme to be fair and reasonable and in the best interests of shareholders, absent any superior proposal. The merger is contingent on approvals from both Brickworks and Soul Patts shareholders, court sanction from the Supreme Court of New South Wales, and the absence of any material adverse events.
Capital Raising and Financial Positioning
Topco plans to raise approximately $1.4 billion through the issuance of new shares to ensure a robust balance sheet. The proceeds will be used to fund growth initiatives, repay significant portions of Brickworks’ debt, including Soul Patts’ convertible bonds, and cover transaction costs. Post-merger, Brickworks shareholders are expected to hold about 19% of Topco, reflecting a substantial stake in the combined entity.
Next Steps and Market Implications
Following the shareholder vote, the scheme awaits final court approval scheduled for 12 September 2025. If sanctioned, Brickworks shares will cease trading on 15 September, with Topco shares commencing deferred settlement trading on 16 September. The merger is expected to be implemented by 23 September 2025. This combination marks a significant milestone for both companies, potentially reshaping their market presence and strategic trajectory.
Bottom Line?
As Brickworks and Soul Pattinson move closer to merging, investors will watch closely to see if Topco can deliver on its promise of scale and simplified governance.
Questions in the middle?
- Will Topco’s capital raising fully support its growth ambitions and debt reduction?
- How will the elimination of cross shareholding impact operational synergies between the former companies?
- Could a superior proposal still emerge before final court approval?