Solstice Inks $14B Deal for Element Solutions in Electronics Materials Move
In a big bet to bolster their business with semiconductors makers and data-center operators, the leaders of Solstice Advanced Materials Inc. have signed a deal to pay more than $14 billion for fellow publicly traded company Element Solutions Inc.
If completed as scheduled in the first half of 2027, the cash-and-stock combination will create a company with nearly $7 billion in annual revenues and higher margins once executives have pushed through the $180 million in cost savings and synergies they are forecasting. Solstice President and CEO David Sewell will lead the merged company, which would get about a third of its sales from electronics-related products versus a little more than 10% today for 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,” Sewell said in a statement. “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.”
“Our customers are just pulling on us so much for solutions—and that’s on the Element side as well as the Solstice side,” Sewell said. “It was just so apparent that we can provide something no one else can provide […] I think our approach is going to be, ‘How do we leverage […] a more integrated solution because that’s what’s going to improve our customers’ yields, their cycle times.”
Word of the Element acquisition comes about four months after Sewell told investors that his team was eyeing some potential acquisitions even though Solstice had just moved out from under Honeywell’s umbrella. At the time, Sewell said he was looking for deals to fit his strategic priorities and added that, “if there’s a very attractive bolt-on asset that’s available at the right price, I think it would be fair to say we might move faster than in typical circumstances.”
Investors don’t appear to be enthused about the proposed Solstice-Element combination, however. In afternoon trading July 6, shares of Solstice (Ticker: SOLS) were down more than 14% to $68.70 while Element shares (Ticker: ESI) were off nearly 3% to about $42.50.
About the Author
Geert De Lombaerde
Senior Editor
A native of Belgium, Geert De Lombaerde has been in business journalism since the mid-1990s and writes about public companies, markets and economic trends for Endeavor Business Media publications, focusing on IndustryWeek, FleetOwner, Oil & Gas Journal, T&D World and Healthcare Innovation. He also curates the twice-monthly Market Moves Strategy newsletter that showcases Endeavor stories on strategy, leadership and investment and contributes to other Market Moves newsletters.
With a degree in journalism from the University of Missouri, he began his reporting career at the Business Courier in Cincinnati in 1997, initially covering retail and the courts before shifting to banking, insurance and investing. He later was managing editor and editor of the Nashville Business Journal before being named editor of the Nashville Post in early 2008. He led a team that helped grow the Post's online traffic more than fivefold before joining Endeavor in September 2021.