Shares of Solstice Advanced Materials Inc. (NASDAQ: SOLS) rose 14% in after-hours trading on Thursday after the company and Element Solutions Inc. (NYSE: ESI) mutually terminated their proposed merger agreement.
The termination, announced after market close, followed feedback from shareholders of both companies regarding the strategic and financial merits of the deal. No termination fees will be imposed on either party, according to the joint statement.
Solstice’s stock advanced alongside a 4% gain in Element Solutions’ shares during the same after-hours session. The move reflects investor confidence in Solstice’s standalone growth strategy, as outlined by company leadership.
Solstice’s board authorized a share buyback program worth up to $500 million, signaling confidence in its long-term prospects. Chairman Dr. Rajeev Gautam stated the company values shareholder input, particularly regarding enthusiasm for Solstice’s independent growth trajectory. CEO David Sewell emphasized the buyback as a reinforcement of management’s confidence in the firm’s strategy and ability to generate shareholder value.
Element Solutions Chairman Ian G.H. Ashken acknowledged the compelling rationale behind the proposed transaction but noted that shareholders prioritized the strength of the company’s current management team, culture, and business portfolio.
The decision comes as Solstice provided updated guidance for full-year 2026. Net sales are projected between $4.125 billion and $4.185 billion, with adjusted EBITDA expected between $1.035 billion and $1.055 billion. Adjusted diluted EPS is forecast between $2.75 and $2.95. For the third quarter, net sales are projected between $990 million and $1.03 billion.
The merger, which would have combined two specialty chemicals companies, was terminated without financial penalties, allowing both firms to pursue independent strategies.
