Solstice Advanced Materials to Acquire Element Solutions in $14.5 Billion Cash-and-Stock Deal

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Solstice Advanced Materials and Element Solutions announced that they have entered into a definitive agreement for Solstice to acquire Element in a cash-and-stock transaction valued at approximately $14.5 billion, including the assumption of net debt. The transaction expands Solstice's advanced materials portfolio with increased exposure to electronics, AI infrastructure, and other 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 for electronics customers, and specialty material businesses serving multiple end markets. Element adds electronics, formulation, and technical service capabilities and a technology portfolio that complement Solstice's strengths in chemistry, application development, refrigerant application solutions, and high-performance materials.

"Overall, we believe the combined company will be very well-positioned to benefit from generational tailwinds in high-growth 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 development 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 for shareholders. Together, we expect Element and Solstice to be extremely well positioned to deliver on our customers' growing requirements for signal integrity, thermal management, reliability and performance."

Sewell added, "Both companies have strong cultures grounded in integrity, innovation, teamwork and customer focus, with comprehensive 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 technology platform and a stronger ability to co-innovate with customers to develop unique solutions addressing emerging, complex requirements 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 growth. 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. 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 industry. This is an exciting opportunity for our people and shareholders, both of whom are expected to participate in the anticipated long-term upside of the combined company."

Strategic and Financial Rationale

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

• Creates Industry-Leading Advanced Materials Portfolio, Accelerating Solstice's Existing Strategy. The combination advances Solstice's strategy to build a scaled advanced materials platform with greater exposure to electronics, AI infrastructure, thermal management, data center cooling applications and other specialty markets.
• Strengthens Solstice's Electronics Platform with Complementary Innovation and Customer Capabilities. Element Solutions brings capabilities aligned with Solstice's electronics growth strategy, including formulation expertise, R&D, technical service and customer relationships. Together, the companies will support customers across semiconductor fabrication, advanced packaging and assembly, from early-stage development through qualification and high-volume production. According to the companies, the combination is expected to create a broader platform for customer-led innovation as electronics customers address challenges associated with advanced electronics. The combined company's scale is also expected to accelerate Element's high-growth technologies, such as Kuprion ActiveCopper.
• Broadens Solstice's Role Across AI Infrastructure and Other Secular Growth Markets. The transaction is expected to strengthen Solstice's exposure to AI infrastructure by connecting its electronics, packaging and thermal management capabilities with data center cooling and refrigerant application solutions. The combined company is also expected to retain specialty positions, including serving as the sole U.S. supplier of uranium conversion services that support the nuclear fuel cycle.
• Strengthens Solstice's Long-Term Growth, Margin and Cash Flow Profile. The combined company is expected to deliver faster growth while maintaining margins and cash flow conversion. On a combined company basis, Solstice expects to deliver mid-to-high single-digit CAGR revenue growth, high single-digit to low double-digit CAGR Adjusted EBITDA growth, and cash conversion of approximately 75% over the medium term. Solstice expects to realize more than $180 million of net synergies by the third year following close through procurement efficiencies, manufacturing optimization, supply chain optimization, operational efficiencies and SG&A savings. The combined company also expects additional benefits from revenue synergy opportunities over time.
• Accretive in Year One, with Rapid De-leveraging. The transaction is expected to be accretive to Adjusted EPS in year one after close. Additionally, the combined company is expected to have net leverage of approximately 3.5x at close and anticipates de-levering to below 3x Adjusted EBITDA within 18 months of close. The combined company will maintain a target net leverage ratio of 2.0–3.0x Adjusted EBITDA and expects to continue its policy of maintaining and growing its quarterly dividend over time.

"This transaction allows us to amplify our transformational growth in electronics while building on the strength of Solstice's existing businesses," Sewell said. "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. Together, we aim to create a higher growth, higher margin advanced 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, for 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 an operating presence across both companies' existing major sites and build a leadership team with representation from both organizations.

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 for 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. According to the company, the financing, together with cash from its balance sheet, will be used to fund the cash consideration payable at closing of the transaction. Solstice said it expects to continue managing its capital structure following completion of the acquisition.

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