Solstice Advanced Materials, a company spun off from Honeywell last year, is reportedly in merger discussions with Element Solutions in a deal that could create a combined chemicals company worth roughly $27 billion including debt, according to a report from the Financial Times published Monday.
The two firms are exploring a merger of equals, with the transaction expected to consist mainly of stock along with some cash. According to the Financial Times, which cited people familiar with the discussions, a deal could potentially be finalized as early as this week.
However, the report noted that no formal agreement has been reached and the talks could still collapse without a deal being struck. Neither company provided a response to requests for comment made outside of normal business hours.
The driving force behind the potential combination is booming demand for specialty chemicals used in artificial intelligence data centers and semiconductor manufacturing — two of the fastest-growing sectors in the technology industry.
Solstice makes specialty chemicals and materials serving a range of industries, including semiconductors, refrigeration, nuclear power, and healthcare. The company noted in May that rising demand for its thermal management and refrigerant products — particularly from AI-powered data centers — along with growing needs in semiconductor electronics, has been fueling its business growth.
Element Solutions, which focuses primarily on supplying specialty chemicals for electronics manufacturing, posted more than 40% growth in first-quarter revenue this year, with AI-related demand cited as the main driver.
According to data from LSEG, Solstice carries a market value of approximately $12.73 billion, while Element Solutions is valued at around $10.63 billion. Both companies have seen their stock prices climb sharply in 2025, with Element Solutions shares up nearly 75% and Solstice shares gaining about 65%.
