Honeywell spinoff Solstice Advanced Materials said it will buy peer specialty chemical company Element Solutions in a $14.5 billion deal, as it seeks to capitalize on growing demand from AI data centers and the chip industries.
The deal would create a larger supplier of materials used in semiconductor manufacturing, electronics and industrial applications, combining Solstice’s refrigerants, specialty materials and uranium-conversion business with Element’s electronics chemicals portfolio.
Shares of Solstice dropped nearly 13%, while those of Element fell 2.1% on Monday, following the announcement of the cash-and-stock deal.
Solstice said the transaction would accelerate its strategy to build an advanced materials platform with greater exposure to electronics, AI infrastructure, thermal management and data-center cooling applications, while maintaining a global footprint.
CEO David Sewell said on a conference call that the deal is expected to deliver more than $180 million in annual cost savings within three years of closing and expand the company’s reach in the semiconductor and electronics markets.
Solstice’s uranium conversion and nuclear-services business would position the combined company to benefit from growing power demand linked to the expansion of AI-focused data centers, company executives said on the call.
Element shareholders will receive $10.00 in cash and 0.500 shares of Solstice common stock for each share held, representing an implied value of $50.10 per share, or a premium of nearly 15% to Element’s last closing price.
Solstice said it would fund the deal with stock, new debt and cash on hand. The company has also secured an initial $4.7 billion bridge commitment from Goldman Sachs for the transaction.
The deal is expected to close in the first half of 2027, following which the combined company will operate as Solstice, and CEO Sewell will continue to serve as the top boss.
Element CEO Ben Gliklich will join Solstice’s board of directors upon the closing of the deal.
Source: Reuters.com