ESI · Element Solutions Inc

On July 6, 2026, Element Solutions Inc. announced a definitive merger agreement with Solstice Advanced Materials Inc. The transaction structure involves two sequential mergers: first, a wholly-owned subsidiary of Solstice merges with and into Element Solutions, making Element Solutions a wholly-owned subsidiary of Solstice; second, the surviving corporation merges into another Solstice subsidiary, ultimately leaving the business as a limited liability company owned by Solstice. Element Solutions stockholders will receive 0.500 shares of Solstice common stock and $10.00 in cash for each share held, representing both equity and cash consideration. The combined company will be led by Solstice, but Element Solutions will appoint three directors to the eleven-member Solstice board post-closing. The transaction is intended to qualify as a tax-free reorganization. Key conditions to closing include approval by both companies' stockholders, regulatory clearance under the HSR Act and other jurisdictions, and receipt of tax opinions. Termination fees are substantial: if Element Solutions backs out for a superior proposal or its board changes recommendation, it pays $376 million; if Solstice does the same, it pays $385 million, with a potential $513 million fee if a tax consent issue arises from Solstice's failure to provide a required opinion. In parallel with the merger, Element Solutions entered into a letter agreement with John E. Capps, its former General Counsel, to preserve his change-in-control benefits, including severance and bonus, aligning with the company's executive retention objectives.