By Colin Kellaher
Solstice Advanced Materials agreed to buy specialty-chemicals maker Element Solutions for more than $12 billion in cash and stock, a move aimed at expanding Solstice's footprint in high-growth electronics and artificial intelligence infrastructure markets.
Solstice on Monday said the deal values Element at about $50.10 a share, a roughly 15% premium to Thursday's closing price of $43.64 for the Miami Beach, Fla., company.
Solstice, a Morris Plains, N.J., maker of refrigerants and advanced materials that was recently spun out of Honeywell, said it will pay $10 cash and issue half of a share, worth about $40.10 based on Thursday's closing price, for each share of Element.
The transaction, slated to close in the first half of 2027, is valued at about $14.5 billion, including the assumption of debt, and will result in Element shareholders owning roughly 44% of the combined company, which would have generated sales of $6.8 billion last year.
Element shares were recently down 1% at $43.19, while shares of Solstice slid 12.1% to $70.53.
Solstice said the transaction accelerates its strategy to build an advanced-materials platform with increased exposure to high-growth electronics, artificial-intelligence infrastructure, thermal management, data-center cooling applications and other attractive specialty markets.
Solstice said Element's electronics, formulation and technical-service capabilities complement its strengths in chemistry, application development, refrigerant-application solutions and high-performance materials.
"Overall, we believe the combined company will be very well-positioned to benefit from generational tailwinds in high-growth end markets," said David Sewell, Solstice's president and chief executive.
Solstice said it will use cash on hand and $4.7 billion in bridge financing from Goldman Sachs to fund the cash portion of the transaction, adding that it remains focused on maintaining a consistently strong balance sheet.
Write to Colin Kellaher at colin.kellaher@wsj.com