BROOKFIELD BUSINESS Stock Price, News & Analysis

Brookfield Business Corporation Class A Exchangeable Subordinate Voting Shares (BBUC) represent a corporate way to invest in Brookfield Business Partners, a global business services and industrials platform. According to company disclosures and recent news releases, Brookfield Business Partners focuses on owning and operating businesses that provide essential products and services and that benefit from a strong competitive position. Investors can access this platform either through Brookfield Business Partners L.P. (trading under BBU on the NYSE and BBU.UN on the TSX) or through Brookfield Business Corporation (trading under BBUC on the NYSE and TSX), whose Class A exchangeable subordinate voting shares are economically equivalent to the limited partnership units.

Brookfield Business Partners is described in multiple news releases as the flagship listed vehicle of Brookfield Asset Management’s Private Equity Group. Brookfield Asset Management is characterized in those releases as a global alternative asset manager with a focus on real assets and essential service businesses. Within this broader private equity framework, Brookfield Business Partners concentrates on businesses that provide essential products and services across industrials, business services and infrastructure services. Segment disclosures in quarterly updates reference operations such as advanced energy storage, engineered components manufacturing, dealer software and technology services, modular building leasing, lottery services and various infrastructure-related services, illustrating the diversified nature of the underlying operations held by the platform.

The Class A exchangeable subordinate voting shares of Brookfield Business Corporation are intended to give investors who prefer a corporate security an alternative to limited partnership units. Company communications emphasize that investors have flexibility to invest in Brookfield Business Partners either through the limited partnership or through the corporation. The exchangeable shares are referenced in financial reporting and distribution disclosures alongside the limited partnership units, and results attributable to BBUC exchangeable shareholders are included in measures such as net income attributable to unitholders and related per-unit calculations.

Brookfield Business Partners’ segment reporting highlights three main operating areas: Industrials, Business Services and Infrastructure Services, with a separate corporate category. Industrials segment commentary in quarterly results refers to an advanced energy storage operation and an electric heat tracing systems manufacturer, as well as engineered components manufacturing and other industrial operations. Business Services segment commentary refers to activities such as dealer software and technology services, a residential mortgage insurer and other service-oriented operations. Infrastructure Services segment commentary references offshore oil services, work access services and modular building leasing services, among others. These references illustrate the breadth of essential products and services that underpin the platform in which BBUC shareholders have an economic interest.

Brookfield Business Partners’ strategy, as described in its news releases, includes capital deployment into acquisitions, capital recycling through partial or full dispositions of businesses, and the use of normal course issuer bids to repurchase units and exchangeable shares. For example, the partnership has discussed investing in businesses such as a Canadian residential and multi-family mortgage lender, an electric heat tracing systems manufacturer and a manufacturer and distributor of critical consumables and testing equipment serving life sciences and environmental labs. It has also described transactions where it sold partial interests in businesses such as an engineered components manufacturing operation, a dealer software and technology services operation and a work access services operation to a new evergreen private equity fund managed by Brookfield Asset Management.

Company communications also highlight ownership positions in businesses that operate in areas such as advanced low-voltage battery technologies for mobility. A news release from Clarios, which describes itself as the global leader in advanced low-voltage battery technologies for mobility, notes that Clarios is owned by Brookfield Business Partners along with institutional partners of Brookfield Asset Management. This ownership is consistent with Brookfield Business Partners’ focus on businesses that provide essential products and services and that operate in sectors with long-term demand drivers.

Brookfield Business Corporation, as the corporate issuer of the BBUC exchangeable shares, is identified in SEC filings as a foreign private issuer that files reports on Form 20-F and furnishes current reports on Form 6-K. These filings include interim reports, material change reports, arrangement agreements, notices of special meetings and related documents. The principal executive office for Brookfield Business Corporation is identified in those filings as being in New York, New York.

In a series of news releases, Brookfield Business Partners has outlined plans to simplify its corporate structure. The partnership announced that it has approved plans to convert Brookfield Business Partners L.P. and Brookfield Business Corporation into one publicly traded Canadian corporation, referred to as BBU Inc. Under the proposed arrangement, all BBU limited partnership units, BBUC Class A exchangeable shares and redemption-exchange units would be exchanged for new Class A shares of BBU Inc. on a one-for-one basis. The class A shares of BBU Inc. are expected, subject to approvals and completion of the transaction, to be listed on both the NYSE and TSX and to reflect the combined capitalization of BBU and BBUC. Company communications indicate that BBU and BBUC are expected to cease to be reporting issuers following closing of the transaction, with BBU Inc. becoming the reporting issuer.

The anticipated benefits of this reorganization, as described by Brookfield Business Partners, include broader access to global investors who prefer corporate structures, improved consolidated trading liquidity through a single listed security, increased demand from expected index inclusion, and simplified financial reporting with the elimination of partnership tax reporting forms. The transaction is expected to be implemented through a court-approved plan of arrangement and requires approvals from BBU unitholders, BBUC shareholders, the British Columbia Supreme Court and applicable regulators. Independent committees of the boards of Brookfield Business Partners L.P. and Brookfield Business Corporation have been formed to review the transaction, and company disclosures note that these committees have obtained a fairness opinion from an independent financial advisor.

For investors evaluating BBUC, the available information indicates that the exchangeable shares provide exposure to the same underlying business services and industrials platform as the BBU units, within the framework of Brookfield Asset Management’s private equity activities. The company emphasizes long-term capital appreciation, the operation of businesses that provide essential products and services, and the use of capital recycling and selective acquisitions to support its objectives. Investors who prefer a corporate security can use BBUC (and, if the proposed reorganization is completed, the successor BBU Inc. shares) as their entry point to this platform.

Business focus and operating segments

Brookfield Business Partners’ disclosures organize its operations into distinct segments that reflect the nature of the underlying businesses. The Industrials segment includes operations such as advanced energy storage and electric heat tracing systems manufacturing, as well as engineered components manufacturing. The Business Services segment includes operations such as dealer software and technology services and a residential mortgage insurer. The Infrastructure Services segment includes operations such as offshore oil services, work access services and modular building leasing services. A corporate category captures items such as corporate borrowings and other corporate-level activities.

Quarterly results releases discuss measures such as Adjusted EBITDA and Adjusted EFO (Adjusted Earnings from Operations) at the segment level. These non-IFRS measures are described by the company as tools to understand the recurring earnings capacity of its businesses and to evaluate performance on a levered basis over the lifecycle of investments. While specific numerical values for these measures change over time, the recurring use of these metrics underscores the partnership’s focus on segment-level operating performance and capital efficiency.

Capital allocation and corporate actions

Brookfield Business Partners’ news releases emphasize capital allocation decisions that include acquisitions, partial or full dispositions, and repurchases of its own equity. Examples include agreements to acquire a Canadian residential and multi-family mortgage lender, the acquisition of an electric heat tracing systems manufacturer, and the acquisition of Antylia Scientific, a manufacturer and distributor of critical consumables and testing equipment serving life sciences and environmental labs. On the disposition side, the partnership has discussed the sale of a shuttle tanker operation within its offshore oil services business, the sale of a Canadian aggregates production operation, and the sale of a road fuels operation, among others.

In addition, Brookfield Business Partners has described a transaction in which it sells partial interests in three businesses—an engineered components manufacturing operation, a dealer software and technology services operation and a work access services operation—to a new evergreen private equity fund managed by Brookfield Asset Management. The partnership receives units of the new fund with an initial redemption value at a discount to net asset value, with an expectation that these units will be redeemed for cash over a defined period. The company explains that such transactions support capital recycling, allow it to accelerate the return of capital under buyback programs, reinvest in growth and reduce corporate leverage.

Normal course issuer bids for both the limited partnership units and the BBUC exchangeable shares are another recurring feature of the capital allocation approach. Brookfield Business Partners has obtained approval from the Toronto Stock Exchange to renew these programs and has disclosed the number of units and exchangeable shares authorized for repurchase and the number actually repurchased over specified periods. All repurchased units and exchangeable shares are cancelled, which reduces the number of securities outstanding.

Planned conversion to BBU Inc. and implications for BBUC

The announced plan to convert Brookfield Business Partners L.P. and Brookfield Business Corporation into a single Canadian corporation, BBU Inc., is a key development for holders of BBUC exchangeable shares. Under the proposed arrangement, each BBU limited partnership unit, BBUC Class A exchangeable share and redemption-exchange unit would be exchanged for one new Class A share of BBU Inc. The company expects that BBU Inc. will pay an annual dividend per share consistent with the current distribution to existing BBU unitholders and the current dividend to existing BBUC shareholders. The management fee payable to Brookfield Asset Management is expected to be based on the market capitalization of BBU Inc. rather than the combined capitalization of BBU and BBUC.

Company disclosures indicate that the transaction is intended to be tax-deferred for Canadian and U.S. investors, subject to the final terms and applicable tax rules. The reorganization is presented as a way to broaden the investor base, increase trading liquidity and simplify the structure for investors who prefer a single corporate issuer. For BBUC shareholders, the proposed transaction would replace their exchangeable shares with direct shares of BBU Inc., while maintaining exposure to the same underlying operations and strategy of Brookfield Business Partners.

Regulatory reporting and governance

Brookfield Business Corporation is identified in SEC filings as a foreign private issuer that files annual reports on Form 20-F and furnishes current reports on Form 6-K. The 6-K filings listed in the available data include items such as interim reports, material change reports, arrangement agreements, notices of special meetings and joint management information circulars. These documents provide regulatory disclosure related to financial performance, corporate reorganizations and shareholder meetings.

In connection with the proposed conversion to BBU Inc., Brookfield Business Corporation and Brookfield Business Partners have filed an arrangement agreement, notices of special meetings and a joint management information circular with Canadian securities regulators and the U.S. Securities and Exchange Commission. Independent committees of the boards have been formed to review the transaction, and these committees have obtained a fairness opinion from an independent financial advisor. The transaction is subject to approvals from security holders, a court and regulators, as described in the company’s news releases and regulatory filings.

Relationship with Brookfield Asset Management

Brookfield Business Partners is described repeatedly as the flagship listed vehicle of Brookfield Asset Management’s Private Equity Group. Brookfield Asset Management is characterized in the news releases as a global alternative asset manager with assets under management across infrastructure, renewable power and transition, private equity, real estate and credit. Brookfield’s private equity business is described as focusing on operational transformation in businesses that provide essential products and services, with a particular emphasis on industrials and manufacturing in certain strategies.

Brookfield Business Partners participates in transactions alongside other Brookfield-managed funds and institutional partners. For example, Brookfield’s private equity strategy has agreed to acquire Fosber, a designer and manufacturer of machinery for the corrugated packaging industry, with Brookfield Business Partners expected to invest a portion of the equity through its Brookfield Capital Partners strategy. Similarly, Clarios identifies Brookfield Business Partners and institutional partners of Brookfield Asset Management as its owners. These relationships illustrate how Brookfield Business Partners, and by extension BBUC shareholders, gain exposure to a range of private equity investments managed within the broader Brookfield ecosystem.

Evergreen investment characteristics

According to the Polygon description provided, Brookfield Business Corp was established as a vehicle that owns and operates certain services and industrial operations on a worldwide basis and as an alternative vehicle for investors who prefer investing in its operations through a corporate structure. The stated goal is to generate returns through long-term capital appreciation with a modest distribution yield. This description aligns with the company’s emphasis on long-term ownership of businesses that provide essential products and services, capital recycling and a distribution that is modest relative to the focus on long-term value creation.

For investors considering BBUC, the available information indicates that the Class A exchangeable subordinate voting shares provide exposure to a diversified platform of business services and industrial operations managed within Brookfield Asset Management’s private equity framework. The platform emphasizes essential products and services, operational performance at the segment level, and capital allocation decisions that include acquisitions, dispositions and equity repurchases. The planned conversion to BBU Inc., if completed as described, would transition BBUC shareholders into a single Canadian corporate issuer while maintaining continuity of the underlying business model and strategy.