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Solstice Shares Surge After Scrapping Element Merger, Announces $500 Million Buyback
Shares of Solstice Advanced Materials Inc. (NASDAQ:SOLS) surged more than 14% in after-hours trading Thursday after the company and Element Solutions Inc. (NYSE:ESI) mutually agreed to terminate their merger agreement. In a sign of confidence in its standalone future, Solstice also announced its board has authorized a $500 million share repurchase program.
Deal Termination and Buyback
The two companies decided to scrap the deal following discussions with shareholders, with both boards concluding the termination was in the best interests of their respective stakeholders, according to a company statement. No termination fees are payable by either party.
Following the announcement, Solstice's board approved the new share buyback plan. Solstice President and CEO David Sewell stated the program "underscores the Board and management team’s confidence in Solstice’s long-term strategy, growth prospects and ability to create value for shareholders."
Market Reaction and Shareholder Feedback
Investors reacted positively to the news of Solstice remaining an independent company. In addition to the 14% jump in Solstice shares, Element Solutions stock also rose 4% in after-hours trading.
AdSolstice Chairman Dr. Rajeev Gautam said the company valued the feedback from shareholders, including their "excitement about Solstice’s strategy and growth trajectory as an independent company." Element Solutions Chairman Ian G.H. Ashken noted that while the deal's rationale was compelling, their shareholders appreciate the company's business portfolio as currently constructed.
Financial Outlook Reaffirmed
Solstice reaffirmed its previously issued financial guidance for the third quarter and full-year 2026, signaling stability in its operational outlook. The company's full-year 2026 forecast includes:
- Net Sales: $4,125 million to $4,185 million
- Adjusted EBITDA: $1,035 million to $1,055 million
- Adjusted Diluted EPS: $2.75 to $2.95
For the third quarter, Solstice projects net sales between $990 million and $1,030 million.
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