Solstice Advanced Materials Inc. (Solstice (SOLS)) announced Monday that it will acquire Element Solutions Inc. (Element Solutions (ESI)) in a cash-and-stock transaction valued at about $14.5 billion, including assumed net debt. The deal is a big bet on the AI data center boom and the specialty materials that make it possible.

The acquisition expands Solstice's presence in electronics, artificial intelligence infrastructure, and other fast-growing specialty materials markets. On a combined basis, the two companies would have had full-year 2025 net sales of approximately $6.8 billion and an adjusted EBITDA margin of 26%, including run-rate synergies. Solstice also expects the acquisition to boost sales growth and adjusted EPS in the first year after closing.

Solstice President and CEO David Sewell framed the deal as a way to capture what he called "generational tailwinds." He said, "Overall, we believe the combined company will be very well-positioned to benefit from generational tailwinds in high-growth end 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.

Element Solutions CEO Ben Gliklich highlighted his company's track record since its founding in 2019. "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," he said. "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."

Deal Strengthens AI And Electronics Platform

The acquisition adds Element's expertise in semiconductor fabrication, advanced packaging, and assembly. It also expands Solstice's capabilities in thermal management and data center cooling for AI infrastructure. In other words, Solstice is betting that the AI boom isn't just about chips and software — it's also about the physical stuff that keeps data centers running cool and efficient.

Transaction Terms

Under the agreement, Element shareholders will receive $10 in cash and 0.500 shares of Solstice common stock for each Element share. The offer values Element at about $50.10 per share, a premium of roughly 15% to its July 2 closing price. After the deal closes, Element shareholders will own about 44% of the combined company.

Solstice expects to achieve more than $180 million in annual net synergies by the third year after closing. Both companies' boards unanimously approved the transaction. Solstice and Element expect to complete the transaction in the first half of 2027, subject to shareholder and regulatory approvals.

To fund the cash portion, Solstice secured a fully committed $4.7 billion bridge financing from Goldman Sachs. The company plans to replace the bridge loan with permanent debt financing. It will use those proceeds, along with cash on its balance sheet, to complete the transaction. Solstice said it remains committed to maintaining a strong balance sheet and a disciplined capital structure. As of March 31, 2026, the company had approximately $642 million in cash and cash equivalents.

Price Action: Solstice Advanced shares were down 14.53% at $68.53, and Element Solutions shares were down 2.84% at $42.40 at the time of publication on Monday, according to market data. The market's reaction suggests some investors think Solstice is paying a lot, or that the integration will be tricky. But the deal's logic is clear: AI data centers need advanced materials, and Solstice wants to be the go-to supplier.