Honeywell spinoff Solstice Advanced Materials said it will buy peer specialty chemical company Element Solutions in a $14.5 billion deal.
The deal will combine Solstice’s refrigerants, specialty materials and uranium-conversion business with Element’s electronics chemicals portfolio, and create a larger supply of materials used in semiconductor manufacturing, electronics and industrial applications. This comes as Solstice seeks to capitalize on the increasing demand for AI data centers and the chip industries.
“We’re at a generational growth opportunity in semiconductors and advanced electronics,” Solstice CEO David Sewell said on CNBC’s “Mad Money” on Monday. “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.”
Solstice’s shares fell following the deal, and closed down about 15%. Element Solutions shares fell 3%.
READ: Nearly 1 million Trump memecoin buyers lost $3.8 billion, analysis finds (July 6, 2026)
Sewell said he believes the sell-off in Solstice was partially driven by deep-pocketed traders making short-term bets on both stocks in the deal, rather than skepticism about Solstice’s strategy for the combination.
“We know there were a lot of hedge funds, a lot of arbitrage in there,” he said. “We’ve been telling the story. Reporting has been very positive on the strategic rationale for the deal.”
Sewell also said the acquisition broadens Solstice’s exposure across the AI infrastructure supply chain, adding capabilities in semiconductor fabrication, advanced chip packaging, and thermal management. He called it a “great growth proposition.”
“The demand is significant, and now we’ve got a complete solution in our product portfolio to help solve the biggest challenges our customers have. We know that as we execute and deliver on what we promise, the share price will follow,” he said.
READ: Amazon to buy Globalstar for $11.57 billion to expand satellite network (April 14, 2026)
Solstice became a publicly traded company last fall, after it was spun out from Honeywell Technologies. Cramer’s Charitable Trust, the portfolio used by the CNBC Investing Club, owns shares of Honeywell. It also has Solstice on its Bullpen watch list of stocks.
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. It has also secured an initial $4.7 billion bridge commitment from Goldman Sachs for the transaction.
The deal is expected to close by the first half of 2027. Following that, the combined company will operate as Solstice, and continue to be led by Sewell.