Brookfield Business Partners Announces Simplification via Conversion to Canadian Corporation

Core Viewpoint - Brookfield Business Partners is simplifying its corporate structure by merging Brookfield Business Partners LP and Brookfield Business Corporation into a single publicly traded entity, BBU Inc., to enhance investor accessibility and drive long-term value for shareholders [1][2]. Corporate Reorganization Details - The reorganization will involve a one-for-one exchange of existing BBU limited partnership units, BBUC class A exchangeable shares, and redemption-exchange units for new class A shares of BBU Inc. [3] - BBU Inc. shares will be listed on both the NYSE and TSX, reflecting the combined market capitalization of BBU and BBUC [3]. - Following the transaction, BBU and BBUC will cease to be reporting issuers, while BBU Inc. will become a reporting issuer [3]. Financial Implications - BBU Inc. will maintain an annual dividend of $0.25 per share, consistent with current distributions to BBU and BBUC shareholders [4]. - Management fees to Brookfield Asset Management will be based on BBU Inc.'s market capitalization rather than the combined market capitalization of BBU and BBUC [4]. Transaction Process - The transaction will be executed through a court-approved plan of arrangement, requiring approval from BBU unitholders and BBUC shareholders, along with customary regulatory approvals [5]. - Independent committees from both BBU and BBUC have been established to review the transaction, with external advisors retained for financial and legal guidance [6]. Anticipated Benefits - The reorganization aims to provide broader access to global investors who prefer corporate structures, improve trading liquidity, and increase demand due to expected index inclusion [8]. - The transaction is tax-deferred for both Canadian and U.S. investors, simplifying financial reporting and eliminating partnership tax reporting forms [8].