As a shareholder in both Washington H. Soul Pattinson (SOL) and Brickworks (BKW), I recently dug into the proposed merger between the two and what it means for dividend-focused investors like us. If you hold either (or both) of these stocks in your portfolio, this is a change worth understanding.
🔄 What’s Happening?
In short, a new company — Topco — will be created to house all the assets of SOL and BKW. Here’s how it works:
- SOL shareholders receive 1 Topco share for every SOL share.
- BKW shareholders receive 0.82 Topco shares for every BKW share.
- Topco will raise ~$1.4 billion in capital and eventually trade under the SOL ticker.
- You can view the sources in this article here
This isn’t just a name change — it’s a major structural overhaul designed to unwind long-standing cross-holdings and make the investment structure cleaner, more efficient, and more transparent.
🧮 How This Affects My Portfolio
Based on my current holdings:
- SOL: 780 shares → 780 Topco shares
- BKW: 575 shares → 471.5 Topco shares
- Total Topco shares post-merger: ~1,251
From a practical point of view, I’ll no longer have two dividend stocks in this part of my portfolio — I’ll have one, with broader exposure.
💰 Dividend Outlook
This is where it gets interesting.
- SOL’s trailing dividend yield: ~3.72% p.a.
- BKW’s trailing dividend yield: ~4.80% p.a.
- SOL has already declared a 59c fully franked dividend (ex-date 21 Aug 2025), paid regardless of the merger.
While Topco hasn’t announced a formal dividend policy yet, the board has confirmed a commitment to a similar income-focused strategy. Given the cash flow from assets like TPG, New Hope, Brickworks’ property JV, and Milton, I expect stable and potentially growing dividends over time.
🚨 Key Things to Watch
- Dilution: Topco will issue new shares to institutions, meaning your slice of the pie is slightly smaller.
- Liquidity and index inclusion: The combined structure could help with ASX index eligibility, which is a plus for price discovery.
- Tax implications: There’s talk of scrip-for-scrip CGT rollover relief, but check with your accountant if you’re sitting on large capital gains.
🗓️ Timeline to Note
| Event | Date |
|---|---|
| Ex-dividend (SOL) | 21 Aug 2025 |
| Dividend paid | 5 Sept 2025 |
| Shareholder vote | 10 Sept 2025 |
| Topco shares issued | 22 Sept 2025 |
| ASX trading under “SOL” resumes | 24 Sept 2025 |
🧠 Final Thoughts
From where I sit as a dividend-focused investor, this merger is a net positive:
- You keep exposure to both SOL’s diversified investment portfolio and BKW’s industrial property arm.
- You gain a cleaner, potentially more transparent structure.
- You maintain access to fully franked dividends, with the potential for further growth.
My plan? Vote in favour, receive the Topco shares, and continue holding.
If you’re like me — focused on growing tax-effective income streams over time — this is a corporate action worth embracing.