Solstice Advanced Materials (Morris Plains, New Jersey) has announced it has entered into a definitive agreement to acquire Element Solutions (Miami) in a cash-and-stock transaction valued at approximately $14.5 billion. The deal is expected to close in the first half of 2027, subject to customary closing conditions.
Solstice said the deal accelerates its strategy to increase its exposure to high-growth electronics, AI infrastructure and nuclear fuel markets. Element Solutions adds focused electronics, formulation and technical service capabilities, along with a “robust” technology portfolio, to complement Solstice’s chemistry, application development, refrigerant application solutions and high-performance materials, the company said.
“This transaction allows us to amplify our transformational growth in electronics while building on the strength of Solstice’s existing businesses,” said Solstice President and CEO David Sewell. “Our refrigerant application 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 improve efficiency, resilience and performance.”
The acquisition will enable the companies to better serve customers across semiconductor fabrication, advanced packaging and assembly, supporting customers from early-stage development through qualification and high-volume production. Solstice said the deal will strengthen its exposure to AI infrastructure by linking Element Solutions’ semiconductor fabrication materials and packaging capabilities with Solstice’s data center cooling and refrigerant application solutions.
“We are creating a scaled advanced materials platform with complementary capabilities to broaden our offerings in our core electronics markets and deliver differentiated solutions to customers,” said Ben Gliklich, CEO of Element Solutions. “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 at the leading edge of the electronics industry.”
Portfolio synergies
By combining their portfolios, the companies aim to drive growth across three key technical areas. In advanced nodes chip fabrication, which Solstice described as a double-digit growth area, the merger combines Solstice’s expertise in photoresist, ancillary chemicals and wet-processing with Element’s electrochemical deposition and copper interconnect technologies. The integration is intended to support the increasingly complex requirements of next-generation semiconductor manufacturing.
In advanced packaging, the deal pairs Solstice’s physical vapor deposition materials with Element’s die-attach adhesives, encapsulants and substrates. The companies said the combination will help address rising demand for multi-chip packaging solutions driven by AI workloads.
The companies also plan to combine their capabilities in thermal management, especially in data centers. The combined company will bring together Solstice’s chip-level heat spreaders and low global-warming potential refrigerants with Element’s board-level solder thermal interface materials. The company will also explore direct-to-chip cooling fluids.
Deal details
When combined, Solstice said the company would have full-year 2025 net sales of approximately $6.8 billion and an adjusted EBITDA of $1.7 billion. Solstice had 2025 net sales of $3.9 billion and Element Solutions had sales of $2.9 billion. Element Solutions’ full-year 2025 adjusted EBITDA was $609 million, which represents a 23.8x multiple on the transaction price.
Solstice expects to deliver mid- to high single-digit compound annual growth rate (CAGR) revenue growth and high single-digit to low double-digit CAGR adjusted EBITDA growth over the medium term. It expects to realize more than $180 million of net synergies by the third year following closing, driven by procurement efficiencies, manufacturing optimization, supply chain optimization, operational efficiencies, and selling, general and administrative (SG&A) savings.
The company anticipates the deal will be accretive to adjusted earnings per share in year one after closing. It expects net leverage of approximately 3.5x at closing and anticipates de-levering to below 3.0x adjusted EBITDA within 18 months of closing while targeting a long-term adjusted EBITDA ratio of 2.0x to 3.0x.
Under the terms of the agreement, Element Solutions shareholders will receive, for each share of Element Solutions common stock, $10.00 in cash and 0.500 share of Solstice common stock, representing a premium of approximately 15% over Element Solutions’ closing share price July 2, which was $43.64. Upon closing, Element Solutions’ shareholders are expected to own approximately 44% of the combined company.
To fund the deal, Solstice has secured an initial $4.7 billion bridge commitment from Goldman Sachs, which it plans to replace with permanent debt financing. The $4.7 billion bridge will be used, in addition to cash from Solstice’s balance sheet, to fund the cash consideration payable at the transaction’s close.
Upon closing, Solstice’s board of directors will be comprised of 11 members, including current Element Solutions CEO Gliklich and two other designees from Element Solutions’ board, the company said.
Sewell will contiune to serve as president and CEO of the combined company.
Solstice spun off from Honeywell Inc. on Oct. 30, 2025.
by Jameson Croteau
Source: chemweek.com
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