Solstice Advanced Materials has entered into a definitive agreement to acquire specialty chemicals company Element Solutions Inc.

The deal is structured as a cash and stock transaction with a total enterprise value exceeding $12 billion. Solstice Advanced Materials Inc (stock ticker: SOLS, down 12.92%) has finalized the acquisition of Element Solutions Inc (stock ticker: ESI, down 1.70%). Under the terms, each share of Element Solutions will be valued at approximately $50.10, representing a roughly 15% premium over its closing price of $43.64 last Thursday.

Headquartered in Morris Plains, New Jersey, Solstice is a recent spin-off from Honeywell focused on refrigerants and advanced materials. The consideration for the deal consists of $10 in cash plus 0.5 of a Solstice share for each Element share held, which equates to a stock value of about $40.10 based on last Thursday's closing price.

The transaction is anticipated to close in the first half of 2027. Including the assumption of Element's debt, the total enterprise value for the acquisition is approximately $14.5 billion. Upon completion, existing Element shareholders are expected to own about 44% of the combined company. The merged entity would have reported combined revenues of around $6.8 billion last year.

Key Strategic Rationale

Solstice stated that this acquisition will accelerate its strategy of building an integrated advanced materials platform, significantly expanding its presence in high-growth specialty material segments. These include markets serving the electronics industry, AI computing infrastructure, thermal management, and liquid cooling for data centers.

The company highlighted that Element's capabilities in electronic chemicals, formulation development, and technical services will complement Solstice's own strengths in chemical research, application development, refrigerant solutions, and high-performance materials.

David Sewell, President and CEO of Solstice, commented, "Collectively, the combined company will be uniquely positioned to benefit from long-term growth trends across several high-growth end markets."

Transaction Financing

Solstice indicated that the cash portion of the acquisition will be funded through a combination of available liquidity and a $4.7 billion bridge financing facility arranged by Goldman Sachs. The company also emphasized its commitment to maintaining a strong and high-quality balance sheet post-transaction.