Brookfield Business Partners Charts Course as a New Corporation After 'Excellent' Year
Brookfield Business Partners L.P. (NYSE: BBU) is poised to conclude a transformative year by finalizing its shift to a conventional corporate structure, management announced during its fourth-quarter earnings discussion. The move caps what CEO Anuj Ranjan termed an "excellent year," driven by aggressive capital recycling, strategic acquisitions, and a focus on operational improvements across its diverse industrial and service sector holdings.
Ranjan detailed that the partnership generated over $2 billion from asset sales throughout 2025, using the proceeds to slash corporate debt by approximately $1 billion. The company remained active on the acquisition front, deploying $700 million into four new investments, while also buying back about $235 million of its own shares—a move executives characterized as purchasing at a "significant discount to intrinsic value."
The impending corporate reorganization, which has received necessary unitholder approvals, is expected to be completed in the coming weeks pending final regulatory nods. Management anticipates the conversion into a single, newly listed corporation will significantly enhance trading liquidity, potentially double index-driven demand for its stock, and simplify access for a global pool of investors.
Operational performance presented a mixed but resilient picture. Adrian Letts, Head of Global Business Operations, described overall conditions as "relatively stable," with North American markets benefiting from easing interest rates and steady consumer spending. Europe faced more headwinds in cyclical sectors like construction, though early signs of improvement were noted, supported by fiscal stimulus in Germany and regional monetary policy shifts.
Portfolio highlights underscored the execution of Brookfield's value-creation playbook. Battery maker Clarios was cited as a standout, with underlying EBITDA growing 40% since acquisition. The company is now investing to expand advanced manufacturing and recycling capacity, bolstered by U.S. production tax credits. At audience measurement firm Nielsen, cost-saving initiatives exceeding $800 million have driven margin expansion, while recent refinancings are set to yield substantial interest savings.
CFO Jaspreet Dehl reported full-year adjusted EBITDA of $2.4 billion, a decrease from the prior year's $2.6 billion, primarily attributed to reduced ownership stakes following partial divestments. On a comparable basis, excluding these sales and tax credits, adjusted EBITDA showed modest growth. The company ended the year with robust corporate liquidity of approximately $2.6 billion.
Looking to 2026, Ranjan signaled an ambitious outlook, suggesting the year could be "very active" with multiple strategic opportunities aligned with the company's focus on essential, cash-flowing businesses.
Analyst & Investor Commentary:
"The reorganization is a long-overdue simplification," said Michael Thorne, portfolio manager at Horizon Capital Advisors. "Unlocking index inclusion and improving liquidity are clear positives for long-term shareholder value. The operational progress at Clarios and Nielsen demonstrates their hands-on approach is working."
"I'm skeptical about the timing," countered Sarah Chen, founding partner of Veritas Investment Research, her tone sharp. "They're touting an 'excellent year' while core EBITDA declined. This feels like a narrative pivot ahead of the corporate conversion to distract from the mixed operational results. The buybacks are welcome, but where's the organic growth engine?"
"The strategic rationale makes sense," observed David Fischer, a retired pension fund manager. "Streamlining the structure should reduce the complexity discount. Their capital recycling discipline—selling mature assets to fund new buys and buybacks—is a classic Brookfield strength that should serve the new corporation well."
"The focus on businesses tied to long-term trends like reshoring and energy transition is compelling," added Priya Sharma, an equity research associate at a major bank. "The key question for 2026 is whether they can deploy their ample liquidity into acquisitions at equally attractive valuations."