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Summary

On 30 January 2026, Diversified United Investment Limited (ASX: DUI) and Australian United Investment Company Limited (ASX: AUI) — two long-established, internally managed listed investment companies (LICs) — announced a merger by way of a Scheme of Arrangement, under which DUI would merge into AUI. The merger completed on 30 April 2026, ending more than 30 years of DUI as a separately listed company.

• Announcement date: 30 January 2026
• Scheme meeting / shareholder vote: 16 April 2026 — approved
• Federal Court approval: 20 April 2026
• Scheme effective date: 21 April 2026
• Scheme Record Date: 7:00pm (AEST), 23 April 2026
• Implementation date: 30 April 2026
• Exchange ratio: approximately 0.4724 new AUI shares for each DUI share held, based on the relative pre-tax net tangible assets (NTA) of the two companies as at the calculation date
• DUI ceased to be separately listed on the ASX following implementation

The merger was designed to create a larger, lower-cost combined LIC, with an expected ~$700,000 a year in cost savings (around 21% of combined operating costs), increased trading liquidity, a potential reduction in the trading discount to pre-tax NTA, greater portfolio flexibility, and increased dividend capacity. AUI expects to maintain its existing fully franked ordinary dividend of 37 cents per share, plus an additional special dividend of 8 cents per share in each of the following four years.

The Australian Taxation Office issued a Class Ruling on 20 May 2026 confirming that eligible DUI shareholders can access scrip-for-scrip capital gains tax rollover relief on the exchange of their DUI shares for AUI shares under the scheme.

Ineligible Shareholders: DUI shareholders who are Ineligible Shareholders did not receive new AUI shares. Instead, these shareholders received their pro-rata share of the net cash proceeds from the sale of those new AUI shares by the sale agent, in accordance with the process set out in the Scheme Booklet.

Tax implications

Capital Gains

This merger is likely a taxable event. However, the ATO Class Ruling issued for this scheme confirms that DUI shareholders who make a capital gain on their DUI shares may be eligible for scrip for scrip rollover relief, allowing them to defer paying capital gains tax on the exchange of DUI shares for AUI shares.

To work out your net capital gain or net capital loss for the year, you must take into account:

• any other capital gains or capital losses you make in the relevant income year from other transactions
• any net capital losses carried forwards from earlier income years
• whether you can apply the CGT discount to any part of your net capital gain.

How to handle this in Sharesight

1 – On the Overview page, select DUI.ASX

2 - Select Edit holding tab

3 - Select Merge this holding

4 - Date of Merger: 30 April 2026

5 - New holding: Search: AUI.ASX

6 - Quantity: 0.4724 new AUI shares for every DUI share

For example, 1,000 DUI shares gets 472.4 AUI shares.

7 - Select Save changes

If you are an Ineligible Shareholder

If you were an Ineligible Shareholder under the scheme, you did not receive AUI shares directly — instead, your entitlement was sold by the sale agent and you received your pro-rata share of the net cash proceeds. Record this as a sell trade that closes off your DUI holding, rather than a merge:

1 – On the Overview page, select DUI.ASX

2 - Select Enter a new trade or adjustment

3 - Trade type: Sell

4 - Quantity: your full DUI holding, to close off the position

5 - Price: the net cash amount per share you received, as shown on the distribution statement from the sale agent

6 - Trade date: the date the cash proceeds were paid to you

7 - Select Save trade

FAQ

What happens to my shares after the merger?

After the scheme was implemented, DUI shareholders became entitled to receive approximately 0.4724 new AUI shares for each DUI share held on the Scheme Record Date (23 April 2026).

Do I need to take any action?

Your DUI shares will be cancelled and replaced with AUI shares, traded under AUI.ASX. You typically don't need to take any action. Your broker should handle the share swap automatically. However, it's always best to check the official Scheme Booklet and announcements for any specific instructions.

What do I receive for my shares?

You will receive approximately 0.4724 new AUI shares for each DUI share held as at the Scheme Record Date. This is an all-scrip merger, with no cash component for eligible shareholders.

If you were an Ineligible Shareholder, you did not receive AUI shares — instead, the sale agent sold the AUI shares you would otherwise have been entitled to, and you received your pro-rata share of the net cash proceeds. See the Ineligible Shareholder steps above for how to record this in Sharesight.

Is this merger a taxable event?

This merger is likely a taxable event. However, the ATO's Class Ruling for this scheme confirms that you may be eligible for scrip for scrip rollover relief if you make a capital gain on your DUI shares. Consult with a tax professional for personalised advice.

You can calculate your estimated tax liability using our CGT calculator. If you have more than one trade, you can add them in Sharesight and run the CGT Report to calculate your tax liability.

Will Sharesight track my cost base if I choose rollover relief?

Yes, Sharesight accurately tracks your cost base. You can find your cost base information in the Historical Cost report.

If you don't have a Sharesight account, sign up here for free, enter the date you bought DUI, follow the steps above to keep track of the cost base.

How does this merger affect my portfolio concentration risk?

You can find out your portfolio diversification using the Diversity report.

Why did DUI and AUI merge?

The merger combined two highly complementary, internally managed LICs with overlapping histories and investment philosophies, to create a larger combined company with greater portfolio scale and flexibility, an expected ~$700,000 a year in cost savings, increased share trading liquidity, potential for a reduced trading discount to pre-tax NTA, and increased dividend capacity — including a planned special dividend of 8 cents per share for each of the four years following the merger.

The guide above is a suggestion on how to handle the corporate action in Sharesight and is not financial or tax advice. We advise you to consult your financial advisor or broker. We also encourage you to review the official documents for full details.