Solstice Abandons $14B Element Solutions Acquisition After Investor Pressure
The leaders of Solstice Advanced Materials Inc. and Element Solutions Inc. have pulled the plug on their plan to join forces after receiving “constructive feedback” from investors on the merits of the deal.
Solstice and Element executives early last month announced that Solstice planned to pay more than $14 billion for Element, whose specialty chemicals businesses would better Solstice to serve demand from firms in the semiconductor, artificial-intelligence and data-center spaces. Combined, the companies would book almost $7 billion in sales and be able to generate $180 million annually from cost cuts and synergies.
While Solstice President and CEO David Sewell said at the time that Element would be “a perfect fit” for Solstice, investors quickly sent a message that they didn’t agree: Shares of Solstice fell more than 15% to about $68 on July 6 and slid another 17% before the announcement late on Aug. 27 that executives had abandoned the deal and agreed neither team owed the other any termination fees.
“Following conversations with our shareholders and discussions between the parties, both boards unanimously believe that it is in the best interests of our respective shareholders, employees and customers to terminate the merger agreement,” Solstice Chairman Rajeev Gautam said in a statement that mirrored one from his Element counterpart, Ian Ashken. “We value the feedback received from shareholders in connection with the Element agreement, including their excitement about Solstice’s strategy and growth trajectory as an independent company. The board is confident that Solstice’s strategic plan and leadership team will deliver substantial value.”
The market gave the deal termination a nod on Aug. 28: In mid-morning trading, Solstice shares (Ticker: SOLS) were up 15% to about $65. Element stock (Ticker: ESI), which had been trading in the low $40s before the deal announcement, was up slightly to $36.68 on Aug. 28.
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.