Solstice, Element terminate $14.5 billion merger deal after shareholder feedback

Shares in Solstice jumped 15% in after-hours trading, with Element Solutions gaining 4%.

Had the deal been completed, it would have created a bigger supplier to the semiconductor, electronics and industrial markets, combining Solstice's refrigerants, specialty materials and uranium-conversion operations with Element's electronics chemicals business.

While the financial and strategic rationale of the merger was compelling, Element Chairman Ian Ashken said it reacted to its shareholders' appreciation of its management team strength, unique culture and business portfolio as currently constructed.

"Our growth trajectory remains compelling, and the momentum in our business continues unabated and in-line with our guidance," added Element Chief Executive Benjamin Gliklich.

Solstice Advanced Materials and Element Solutions have mutually agreed to shelve their $14.5 billion merger, citing feedback from both sets of shareholders that they preferred each retain their independence and existing strategies, the pair said in statements on Thursday.

The proposed combination, announced on July 6 and coming just 10 months since Solstice completed its spin-off from Honeywell, had been billed as creating a substantial supplier of chemicals for semiconductor manufacturing, at a time of surging demand for the devices to support the build-out of artificial intelligence infrastructure.

Both companies said they had received feedback from shareholders which had led to a mutual decision to end the merger. Neither company will pay any penalties as part of the action.