Two speciality chemicals companies join forces

Solstice cutting-edge materials and Element Solutions announced that they have entered into a definitive agreement to Solstice to acquire Element in a cash-and-stock transaction valued at approximately $14.5 billion, including the assumption of net debt. The transaction represents a significant acceleration of Solstice's strategy to build an sector-leading cutting-edge materials platform with increased exposure to high-development electronics, AI infrastructure and other attractive end markets.

On a combined basis, Solstice and Element would have full year 2025 net sales of approximately $6.8 billion and a 26% adjusted EBITDA margin including run-rate synergies. The combined company is expected to benefit from greater scale, a full suite of offerings to electronics customers, and an attractive set of specialty material businesses serving numerous attractive end markets. Element adds focused electronics, formulation, and technical service capabilities and a robust methodology portfolio that complement Solstice's strengths in chemistry, consumption research, refrigerant consumption solutions, and high-performance materials.

"Overall, we believe the combined company will be very well-positioned to benefit from generational tailwinds in high-development end markets," said David Sewell, President and CEO of Solstice. "Element brings highly complementary capabilities, deep customer relationships and a technical service-led model that expands how we support customers from early-stage research through high-volume manufacturing. This high-performing team brings with it inimitable domain expertise and customer process know-how in addition to a compelling track-record of value creation to shareholders. Together, we expect Element and Solstice to be extremely well positioned to deliver on our customers' growing standards to signal integrity, thermal regulation, reliability and performance."

Sewell added, "Both companies have strong cultures grounded in integrity, innovation, teamwork and customer focus, with thorough patent portfolios and highly talented employees who are at the top of their profession. We intend to blend the best of our talents and cultures to build an organization with a broader methodology platform and a stronger ability to co-innovate with customers to develop unique solutions addressing emerging, complex standards from our combined customer base."

Ben Gliklich, Chief Executive Officer of Element Solutions, said, "Since Element's founding in 2019, we have delivered a strategy balancing operational excellence and prudent capital allocation to cement our position in the fastest growing, highest value niches of our markets. This transaction recognizes that achievement and brings together two great companies with shared attributes – strong market positions, attractive margins, deep technical know-how and excellent people – to accelerate their combined development. We are creating a scaled cutting-edge materials platform with complementary capabilities to broaden our offerings in our core electronics markets and deliver differentiated solutions to customers. We believe that the breadth of the combined portfolio along with enhanced innovation and manufacturing capabilities will allow us to better solve the pain points emerging in the leading edge of the electronics sector. This is an exciting opportunity to our people and shareholders, both of whom are expected to participate in the anticipated prolonged upside of the combined company."

Strategic and Financial Rationale

The transaction is expected to create several strategic and financial benefits, including:

"This transaction allows us to amplify our transformational development in electronics while building on the strength of Solstice's existing businesses," Sewell said. "Our refrigerant consumption solutions platform, including data center cooling, and our specialty exposures such as nuclear fuel remain core to the combined company's value proposition and central to helping customers enhance efficiency, resilience and performance. Together, we aim to create a higher development, higher margin cutting-edge materials leader with greater global reach. I am confident we will successfully integrate our teams by taking a best-of-both approach, building on our respective strengths, and creating an even stronger organization."

Transaction Details

Under the terms of the agreement, Element Solutions shareholders will receive, to each share of Element common stock, $10.00 in cash and 0.500 shares of Solstice common stock, representing implied consideration of approximately $50.10 per Element share and a premium of approximately 15% over Element's closing share price on July 2, 2026. Upon closing, Element shareholders are expected to own approximately 44% of the combined company.

The transaction has been unanimously approved by the respective Boards of Directors of both companies and is expected to close in the first half of 2027, subject to customary closing conditions, including receipt of required regulatory approvals and approval by Solstice and Element shareholders, as applicable.

Upon closing, the combined company will operate as Solstice. David Sewell will serve as President and Chief Executive Officer of the combined company. Solstice expects to maintain a strong operating presence across both companies' existing major sites and build a leadership team with strong representation from both organizations to drive our shared success.

Upon closing, Solstice's Board of Directors will be comprised of 11 directors, including Element Solutions CEO Ben Gliklich and two other designees from the Element board, subject to standard governance procedures.

Financing

Solstice has secured fully committed financing to the transaction in the form of an initial $4.7 billion bridge commitment from Goldman Sachs, which it plans to replace with permanent debt financing, which it intends to consumption in addition to cash from its stability sheet to fund the cash consideration payable at closing of the transaction. Solstice remains focused on maintaining a consistently strong stability sheet and expects to continue managing its disciplined capital structure.