MORRIS PLAINS, New Jersey — Solstice Advanced Materials announced it has entered into a definitive agreement to acquire Element Solutions in a cash-and-stock transaction valued at approximately $14.5 billion, including assumed net debt. According to Solstice, the acquisition is intended to expand its advanced materials portfolio while strengthening its position in electronics, artificial intelligence infrastructure, refrigerant application solutions, and data center cooling.

The companies said the combined business would have approximately $6.8 billion in 2025 net sales and an adjusted EBITDA margin of about 26%, including expected synergies.

The transaction expands Solstice's capabilities in refrigerant application solutions and thermal management technologies used in data center cooling. The combined company will integrate Element's electronics, semiconductor packaging, and technical service expertise with Solstice's chemistry, application development, and high-performance materials businesses.

According to Solstice President and CEO David Sewell, the acquisition is designed to strengthen the company's ability to support customers developing next-generation electronics, advanced packaging, thermal management systems, and cooling technologies.

"Overall, we believe the combined company will be very well-positioned to benefit from generational tailwinds in high-growth end markets," Sewell said in a statement. "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, CEO of Element Solutions, said the acquisition is an exciting opportunity for the company. "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."

Solstice expects to achieve more than $180 million in annual net synergies by the third year after the transaction closes through procurement, manufacturing, supply chain, operational, and administrative efficiencies. The company also expects the acquisition to be accretive to adjusted earnings per share during the first year after closing.

Under the agreement, Element Solutions shareholders will receive $10 in cash and 0.500 shares of Solstice common stock for each Element share, representing implied consideration of approximately $50.10 per share. Upon completion of the transaction, Element shareholders are expected to own approximately 44% of the combined company.

The acquisition has been unanimously approved by both companies' boards of directors and is expected to close during the first half of 2027, subject to shareholder approval, regulatory clearances, and customary closing conditions.

Following the transaction, the combined company will continue operating as Solstice Advanced Materials, led by Sewell. According to the company, it plans to maintain operating locations across both organizations while building an integrated leadership team with representatives from each business.

After an investor call, Solstice Advanced Materials' stock fell 15%, reflecting investor concerns about the size and financing of the transaction, The Wall Street Journal reported. 

Sewell defended the deal on CNBC's "Mad Money" on July 6, saying, "We're at a generational growth opportunity in semiconductors and advanced electronics. The combination of our two companies ... gives us a comprehensive product portfolio and really a world-leading advanced materials business in semiconductors, data centers, AI."