Australia's Soul Pattinson and Brickworks gain as Morningstar backs $9 billion merger

Washington H. Soul Pattinson and

05/08/2025 03:21

Updates

** Shares of Washington H Soul Pattinson SOL.AX rise as much as 3.1% to A$41.545, their highest level since July 18

** Brickworks BKW.AX shares gain as much as 3.4% to A$33.910, making their biggest intraday pct gain since June 2

** Analysts at Morningstar recommend shareholders in both SOL and BKW vote in favour of their $9 bln merger

** Australian investment firm SOL is buying out its building products affiliate BKW, streamlining the two companies' complex cross-ownership of each other that has been in place for nearly 60 years

** Though merger does not create fundamental shareholder value, it reallocates the value between shareholders in SOL, BKW and other investors in the equity raising — investment research firm

** Says deal, effectively a takeover, is timed opportunistically and modestly undervalues BKW, the smaller party

** Morningstar flags non-financial benefits for BKW investors, with the deal addressing long-standing governance overhang from cross-shareholding

** YTD, SOL up 21% while BKW has gained 31.7%

 (Reporting by Rishav Chatterjee & Rajasik Mukherjee in Bengaluru)

 ((Rishav.Chatterjee@thomsonreuters.com))