Diversified United Investment (ASX:DUI) has entered into a formal implementation deed to merge with Australian United Investment (ASX:AUI), creating a simplified investment powerhouse with a projected market capitalisation of $2.5 billion.
The merger, to be executed via a scheme of arrangement, aims to consolidate two highly complementary portfolios to achieve greater scale and significantly lower operating costs.
Under the proposed terms, DUI shareholders will receive newly issued AUI shares based on the relative pre-tax net tangible assets of both firms.
Based on recent filings, the indicative exchange ratio is approximately 0.4815 AUI shares for every DUI share.
A major highlight of the deal is a projected 37.5% increase in annual dividends for DUI shareholders.