{"url_path":"/sec/esi/8-k/2026-07-06/item-1-01","section_key":"item-1-01","section_title":"Item 1.01 Entry into a Material Definitive Agreement.**","topic":"sec","document":{"doc_type":"8-K","doc_date":"2026-07-06","source_url":"https://www.sec.gov/Archives/edgar/data/1590714/0001104659-26-080825-index.html","accession_number":"0001104659-26-080825","cik":"0001590714","ticker":"ESI","issuer_name":"Element Solutions Inc","edgar_url":"https://www.sec.gov/Archives/edgar/data/1590714/0001104659-26-080825-index.html","primary_entity_key":"0001590714","primary_entity_name":"Element Solutions Inc"},"word_count":3162,"has_tables":true,"body_markdown":"**Item 1.01 Entry into a Material Definitive Agreement.**\n\n \n\nMerger Agreement\n\n \n\nOn July 6,\n2026, Element Solutions Inc, a Delaware corporation (“Element Solutions”), entered into an Agreement and Plan of Merger\n(the “Merger Agreement”) with Solstice Advanced Materials Inc., a Delaware corporation (“Solstice”), Solar\nMerger Sub One Inc., a Delaware corporation and a wholly-owned subsidiary of Solstice (“Merger Sub One”), and Solar\nMerger Sub Two LLC, a Delaware limited liability company and a wholly-owned subsidiary of Solstice (“Merger Sub Two”\nand, together with Merger Sub One, the “Merger Subs”) pursuant to which, among other things and subject to the terms and conditions of the Merger Agreement,\n(i) Merger Sub One will merge with and into Element Solutions (the “First Merger”), with Element Solutions\nsurviving the merger as a wholly-owned subsidiary of Solstice (the “Surviving Corporation”), and (ii) immediately\nfollowing the First Merger, and as part of the same overall transaction, the Surviving Corporation will merge with and into Merger\nSub Two (the “Second Merger” and together with the First Merger, the “Mergers”), with Merger Sub Two\nsurviving the Second Merger as a wholly-owned subsidiary of Solstice (the “Surviving Company”). The Mergers, taken\ntogether, are intended to qualify as a “reorganization” within the meaning of Section 368(a) of the Internal\nRevenue Code of 1986, as amended. The Mergers and the other transactions contemplated by the Merger Agreement are collectively\nreferred to as the “Transactions”.\n\n \n\nThe boards of directors of each of Solstice\nand Element Solutions (the “Solstice Board” and the “Element Solutions Board,” respectively) have unanimously\napproved the Merger Agreement and the Transactions, including, in the case of Solstice, the Mergers and the issuance by Solstice of Solstice\ncommon stock, par value $0.01 per share (the “Solstice Common Stock”) as Merger Consideration (as defined below).\n\n \n\n*Merger Consideration*\n\n \n\nPursuant to the Merger Agreement, and upon\nthe terms and subject to the conditions described therein, at the effective time of the First Merger (the “First Merger Effective\nTime”), each share of Element Solutions common stock, par value $0.01 per share (“Element Solutions Common Stock”),\nissued and outstanding immediately prior to the First Merger Effective Time (other than (i) shares held by Element Solutions (or\nheld in Element Solutions’ treasury) or by Merger Sub One, which will be canceled and retired, (ii) shares held by Solstice\nor any of its subsidiaries (other than Merger Sub One) or held by any wholly-owned subsidiary of Element Solutions, which will remain\noutstanding, and (iii) shares held by any Element Solutions stockholder who is entitled to demand and properly demands appraisal\nof such shares pursuant to, and who complies in all respects with, Section 262 of the General Corporation Law of the State of Delaware)\nwill be automatically converted into the right to receive (A) 0.500 shares (the “Exchange Ratio”) of Solstice Common\nStock (the shares to be issued in connection with the First Merger, the “Stock Consideration”), and (B) $10.00 in cash,\nwithout interest (the “Per Share Cash Amount” and, together with the Stock Consideration, the “Merger Consideration”),\nplus cash in lieu of any fractional shares of Solstice Common Stock.\n\n \n\nAt the effective time of the Second Merger (the\n“Second Merger Effective Time”), each share of Merger Sub Two issued and outstanding immediately prior to the Second Merger\nEffective Time will remain issued and outstanding as a unit of the Surviving Company and each share of common stock of the Surviving Corporation\nissued and outstanding immediately prior to the Second Merger Effective Time will be canceled and cease to exist without any conversion\nor payment therefor.\n\n \n\nThe shares of Solstice Common Stock to be issued\nin connection with the First Merger will be listed on the Nasdaq Global Select Market (“Nasdaq”). In connection with the issuance\nof the Stock Consideration by Solstice, as promptly as reasonably practicable following the date of the Merger Agreement, Solstice and\nElement Solutions will jointly prepare and cause to be filed with the U.S. Securities and Exchange Commission (the “SEC”)\na registration statement on Form S-4 (the “Form S-4”), which will include the joint proxy statement of Solstice\nand Element Solutions for their respective meeting of stockholders relating to the Transactions.\n\n \n\n*Treatment of Equity Awards*\n\n \n\nAt the effective time of the Mergers, each Element\nSolutions restricted stock unit (“RSU”) held by an individual who is party to an Element Solutions Change in Control Agreement or a non-employee director and each Element Solutions\nRSU granted in 2024 and each Element Solutions performance stock unit (“PSU”) held by an individual who is party\nto an Element Solutions Change in Control Agreement and each Element Solutions PSU granted in 2024,\nwhether vested or unvested, will accelerate and vest in full (with the number of shares subject to each such Element Solutions PSU determined\nbased on performance deemed achieved at (i) 200% of the target performance level for awards granted in 2024 and 2026 and (ii) 300%\nof the target performance level for awards granted in 2025) and be canceled and converted into the right to receive the Merger Consideration,\nsubject to applicable tax withholdings.\n\n \n\n \n\n \n\n \n\nEach other outstanding and unvested Element\nSolutions RSU and Element Solutions PSU, except as provided otherwise in the Element Solutions Disclosure Schedule, will be assumed\nand converted into a number of Solstice RSUs, rounded up to the nearest whole share (each, a “Converted RSU” or\n“Converted PSU,” as applicable), equal to the product of the number of shares of Element Solutions Common Stock subject\nto such award (with performance for Converted PSUs deemed achieved at 300% of target performance level for 2025 grants and 200% of\nthe target performance level for 2026 grants), multiplied by the Conversion Ratio. Each Converted RSU and Converted PSU will\ncontinue to vest on the same schedule as the corresponding Element Solutions RSU and Element Solutions PSU, subject to continued\nservice, and will be settled in Solstice Common Stock upon vesting, subject to applicable tax withholdings; provided that if any\nholder is terminated without Cause or resigns for Good Reason, such holder’s Converted RSUs or Converted PSUs will immediately\nvest in full. The “Conversion Ratio” is equal to the sum of (i) the Exchange Ratio plus (ii) the quotient\nobtained by dividing the Per Share Cash Amount by the volume weighted average trading price of a share of Solstice Common Stock on\nthe Nasdaq Stock Market for the five consecutive trading days ending on the trading day immediately preceding the Closing Date (the “Parent Measurement Price”).\n\n \n\nIn addition, each Element Solutions option\nwith a per share exercise price less than the Company Measurement Price, whether vested or unvested, that is outstanding immediately\nprior to the First Merger Effective Time will accelerate and vest in full and be canceled and converted into a number of shares of\nElement Solutions Common Stock equal to the product of (i) the number of shares of Element Solutions Common Stock applicable to\nsuch Element Solutions option, multiplied by (ii) the difference between (a) the Company Measurement Price and\n(b) the per share exercise price applicable to such Element Solutions option, divided by the Company Measurement Price, with\nany fractional shares rounded up to the nearest whole share, with such amount in turn converted into the right to receive the Merger\nConsideration, subject to applicable tax withholdings. Each Element Solutions option with a per share exercise price equal to or\ngreater than the Company Measurement Price will be canceled for no consideration. “Company Measurement Price” means an\namount equal to the volume weighted average trading price of a share of Element Solutions Common Stock on the New York Stock\nExchange for the five consecutive trading days ending on the trading day immediately preceding the Closing Date.\n\n \n\n*Representations, Warranties and Covenants*\n\n \n\nThe Merger\nAgreement contains customary representations and warranties of Solstice and the Merger Subs, on the one hand, and Element Solutions,\non the other hand, relating to their respective businesses and public filings, among other matters, in each case generally subject\nto certain customary qualifications. In addition, the Merger Agreement provides for customary pre-closing covenants, including\ncovenants by each of Solstice and Element Solutions to use reasonable best efforts to (i) conduct its business in the ordinary\ncourse in all material respects during the period between the signing of the Merger Agreement and the closing of the Mergers\n(subject to certain exceptions), (ii) to refrain from taking certain actions without the other party’s consent and\n(iii) to cooperate and use reasonable best efforts with respect to seeking regulatory approvals (subject to certain specified\nlimitations). Both Solstice and Element Solutions have agreed not to solicit proposals from, provide information to, or enter into\ndiscussions with, third parties, in each case, relating to specified alternative transaction proposals.\n\n \n\nNotwithstanding the restrictions related to alternative\ntransactions, prior to obtaining the approval of their respective stockholders, each of Solstice and Element Solutions may under certain\ncircumstances provide non-public information to, and participate in discussions with, third parties with respect to any unsolicited alternative\ntransaction proposals that the Solstice Board or the Element Solutions Board, as applicable, has, among other things, determined (i) did\nnot result from a material breach of its non-solicitation obligations under the Merger Agreement and (ii) constitutes or would reasonably\nbe expected to result in a Superior Company Proposal or a Superior Parent Proposal, as applicable, after taking into account the advice\nof an independent financial advisor and its outside legal counsel. A “Superior Parent Proposal” or a “Superior Company\nProposal” is an unsolicited, bona fide written offer by a third party concerning an alternative transaction acquisition proposal\nthat did not result from a material breach of the relevant provisions of the Merger Agreement and is on terms and conditions that the\nElement Solutions Board or Solstice Board, as applicable, has determined in good faith, after taking into account the advice of an independent\nfinancial advisor and its outside legal counsel and the likelihood and timing of consummation of the transaction contemplated by such\noffer, to be more favorable from a financial point of view to such party’s stockholders than the Mergers.\n\n \n\n \n\n \n\n \n\nPrior to obtaining the relevant stockholder approval,\nthe Element Solutions Board or the Solstice Board, as applicable, may change its recommendation to its stockholders in connection with\nthe Mergers, subject to complying with certain notice and other specified conditions contained in the Merger Agreement, including giving\nthe other party an opportunity to propose revisions to the terms of the Merger Agreement during a match right period.\n\n \n\nIn addition, Solstice has agreed to take all\nnecessary actions to cause, effective as of the First Merger Effective Time, the Solstice Board to consist of eleven directors comprising\neight directors of Solstice as of immediately prior to the First Merger Effective Time and three Element Solutions designees from the\nexisting Element Solutions Board.\n\n \n\n*Conditions to the Transaction*\n\n \n\nConsummation of the Mergers is subject to\nthe satisfaction or waiver of certain conditions, including, among others, (a) adoption of the Merger Agreement by Element Solutions’\nstockholders; (b) the approval of the issuance of Solstice Common Stock in the Mergers (the “Solstice Stock Issuance”)\nby Solstice’s stockholders; (c) the effectiveness of a registration statement on Form S-4 to be filed with the Securities\nand Exchange Commission (the “SEC”) by Solstice in connection with the issuance of Solstice Common Stock in the Mergers; (d) the\napproval for listing of the shares of Solstice Common Stock to be issued in the Mergers on the Nasdaq Stock Market; and (e) the expiration\nor termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR\nAct”), and certain other regulatory approvals. The obligation of each party to consummate the Mergers is also conditioned upon,\namong other things, the accuracy of the other party’s representations and warranties (subject to certain materiality exceptions),\nthe other party having performed in all material respects its covenants and obligations under the Merger Agreement, the absence of a “Material\nAdverse Effect” on the other party (as defined in the Merger Agreement), and the receipt by such party of an opinion of counsel\nto the effect that the Mergers will qualify for their intended tax treatment.\n\n \n\n*Termination*\n\n \n\nThe Merger\nAgreement also provides the parties with rights to terminate the Merger Agreement in certain circumstances, including (i) by\nmutual written consent of Solstice and Element Solutions; (ii) by either party if the Mergers have not been consummated by\nJuly 6, 2027 (the “End Date”), subject to an automatic extension until January 5, 2028 under certain\ncircumstances for the purposes of obtaining certain regulatory approvals; (iii) by either party if a governmental body of\ncompetent jurisdiction issues a final and non-appealable order permanently restraining, enjoining or otherwise prohibiting the\nMergers, or if a law is enacted that makes consummation of the Mergers illegal; (iv) by either party if Element\nSolutions’ stockholders fail to adopt the Merger Agreement or Solstice’s stockholders fail to approve the Solstice Stock\nIssuance; (v) by either party in the event of certain uncured breaches by the other party of its representations, warranties or\ncovenants (subject, in each case, to a 30-day cure period for curable breaches, provided that the terminating party is not then\nitself in material breach); (vi) by Element Solutions if the consent required to be provided by Honeywell International Inc.\n(“Honeywell”), pursuant to the Tax Matters Agreement (as defined in the Merger Agreement) (the “RemainCo\nConsent”) is withdrawn, Honeywell initiates a RemainCo Action, or the RemainCo Consent is otherwise not in full force or\neffect (subject to a waiting period equal to the earlier of 60 days or one Business Day prior to the End Date); (vii) by Solstice or Element Solutions, within ten business days of the Solstice\nBoard or Element Solutions Board, as applicable, changing its recommendation in connection with the Mergers or has failed to make or\nreaffirm such recommendation in certain circumstances or (viii) by Solstice or Element Solutions prior to obtaining the\napplicable stockholder approval, to enter into a definitive agreement with respect to a Superior Parent Proposal or a Superior\nCompany Proposal, as applicable, in each case subject to compliance with the applicable provisions of the Merger Agreement.\n\n \n\nIf the Merger Agreement is terminated under\ncertain circumstances, Element Solutions would be obligated to pay Solstice a termination fee of $376,000,000 (the “Element Solutions\nTermination Fee”) in cash. The Element Solutions Termination Fee would be payable, among other circumstances, if (i) the Merger\nAgreement is terminated by Solstice following the Element Solutions Board changing or withdrawing its recommendation regarding the Mergers;\n(ii) Element Solutions terminates the Merger Agreement to enter into a definitive agreement with respect to a superior proposal;\nor (iii) following the public disclosure of an alternative acquisition proposal with respect to Element Solutions, the Merger Agreement\nis terminated for failure to obtain Element Solutions’ stockholder approval and, within 12 months after such termination, Element\nSolutions enters into a definitive agreement for, or consummates, certain alternative acquisition transactions.\n\n \n\n \n\n \n\n \n\nIf the Merger Agreement is terminated under\ncertain circumstances, Solstice would be obligated to pay Element Solutions a termination fee of $385,000,000 (the “Solstice Termination\nFee”) in cash. The Solstice Termination Fee would be payable, among other circumstances, if (i) the Merger Agreement is terminated\nby Element Solutions following the Solstice Board changing or withdrawing its recommendation regarding the Solstice Stock Issuance; (ii) Solstice\nterminates the Merger Agreement to enter into a definitive agreement with respect to a superior proposal; or (iii) following the\npublic disclosure of an alternative acquisition proposal with respect to Solstice, the Merger Agreement is terminated for failure to obtain\nSolstice’s stockholder approval and, within 12 months after such termination, Solstice enters into a definitive agreement for, or\nconsummates, certain alternative acquisition transactions.\n\n \n\nIn addition, if Element Solutions terminates the Merger Agreement due to the withdrawal of the RemainCo Consent or the initiation of certain\nlegal proceedings by Honeywell, and Solstice has delivered a valid unqualified tax opinion to Element Solutions and Honeywell confirming\nthat the Mergers will not cause Honeywell to recognize gain under Section 355(e) of the Internal Revenue Code of 1986, as amended, which\nremains in full force and effect prior to such termination, then Solstice would be obligated to pay Element Solutions a termination fee\nof $385,000,000 in cash. If Element Solutions terminates the Merger Agreement due to the withdrawal of the RemainCo Consent or the initiation\nof certain legal proceedings by Honeywell, and Solstice fails to deliver such a valid unqualified tax opinion prior to such termination,\nthen Solstice would be obligated to pay Element Solutions a termination fee of $513,000,000 in cash. No termination fee would be payable\nby Solstice in either case if the withdrawal of the RemainCo Consent or such legal proceedings result from a breach by Element Solutions\nof its tax representation letter delivered in connection with its own unqualified tax opinion that the Mergers will qualify for their\nintended tax treatment.\n\n \n\nIn no event will either party be required\nto pay its applicable termination fee on more than one occasion.\n\n \n\nExcept as otherwise expressly provided in\nthe Merger Agreement, all fees and expenses incurred in connection with the Merger Agreement and the transactions contemplated thereby\nwill be paid by the party incurring such fees and expenses, whether or not the Mergers are consummated, except that Solstice will bear\nall filing fees incurred by the parties in connection with the premerger notification and report forms under the HSR Act and filings under\napplicable foreign antitrust, competition or foreign direct investment laws.\n\n \n\nThe foregoing description of the Merger Agreement\nis qualified in its entirety by reference to the full text of the Merger Agreement, a copy of which is attached as Exhibit 2.1 to\nthis Current Report on Form 8-K (the “Report”) and is incorporated herein by reference.\n\n \n\nThe Merger Agreement has been attached to\nprovide investors with information regarding its terms. It is not intended to provide any other factual information about the parties.\nIn particular, the assertions embodied in the representations and warranties contained in the Merger Agreement are qualified by information\nin confidential disclosure schedules provided by each party in connection with the signing of the Merger Agreement. These confidential\ndisclosure schedules contain information that modifies, qualifies and creates exceptions to the representations and warranties set forth\nin the Merger Agreement. Moreover, certain representations and warranties in the Merger Agreement were used for the purpose of allocating\nrisk between the parties rather than establishing matters as facts. Investors are not third-party beneficiaries under the Merger Agreement\nand should not rely on the representations, warranties, and covenants or any descriptions thereof as characterizations of the actual state\nof facts or condition of the parties thereto or any of their respective subsidiaries or affiliates. Moreover, information concerning the\nsubject matter of representations and warranties may change after the date of the Merger Agreement, which subsequent information may or\nmay not be fully reflected in parties’ public disclosures. Accordingly, you should not rely on the representations and warranties\nin the Merger Agreement as characterizations of the actual state of facts about the parties."}