Starboard urges Solstice to cut expenses by about $100 million after scrapping acquisition

Key Facts

Activist investor Starboard Value is urging Solstice Advanced Materials to cut overhead expenses by about $100 million, according to the report published on our platform, after the cancellation of a planned acquisition. The demand concerns the advanced materials company as it incurs expenses associated with operating as an independent public company. Solstice attributed higher corporate and other costs to increased selling, general and administrative expenses, according to its quarterly filing with the U.S. Securities and Exchange Commission. It said the increase primarily reflected higher personnel expenses resulting from the addition of staff needed to operate independently. The reduction sought by Starboard concerns overhead expenses and is not a cost-cutting program announced by Solstice management.

Solstice's results for the second quarter of 2026 showed its adjusted earnings before interest, taxes, depreciation and amortization margin fell to 25.3%, according to its earnings release filed with the SEC. The margin declined 218 basis points from the corresponding period a year earlier, putting the call for expense cuts in the context of declining profitability. In February, the company had issued adjusted earnings per share guidance for 2026 below the average analyst estimate at the time, according to a Reuters report published on Investing.com. Its guidance published at the time ranged from $2.45 to $2.75 per share, compared with an average estimate of $2.93. Even the upper end of that range was below the analyst estimate cited in the report, which discussed continued pressure on margins.

Solstice had agreed to buy Element Solutions in a cash-and-stock deal with an announced value of about $14.5 billion, according to the acquisition announcement. That value included the assumption of net debt as part of the announced total consideration. The two parties subsequently mutually agreed to terminate the merger agreement, and Solstice's chairman linked the decision to discussions preceding the cancellation. He said in the company's statement that the decision followed "conversations with our shareholders and discussions between the parties," placing shareholder contacts among the circumstances surrounding the termination. Solstice confirmed in the same statement that "neither party owes any fees as a result of terminating the transaction."

Alongside the announcement that the deal had been scrapped, Solstice's board approved a program to repurchase its common stock, according to an SEC filing. The program authorizes the company to buy back up to $500 million of shares, the maximum amount approved by the board. In the earlier reaction to the merger cancellation and buyback announcement, Investing.com reported in August that Solstice shares rose 17%. The share price cited in that report was $66.05, following the deal and capital announcements. That move came in trading after the acquisition was abandoned and the program approved, before the current report on Starboard's demand for overhead cuts.

Meanwhile, Solstice's nuclear business recorded revenue growth in the second quarter of 2026, according to the company's earnings report for the period. Revenue rose 27% compared with the second quarter of 2025, a performance the company attributed to both improved pricing and higher volumes. It said the business's revenue reflected "favorable pricing and increased volumes," identifying the contribution of both price and business volume to growth. Nuclear revenue rose in the same quarter that the company's overall adjusted earnings margin declined. In the background, the additional staff needed to operate as an independent public company remained the main reason Solstice cited for higher personnel expenses in corporate and other activities.

Solstice set its next financial results announcement for November 4, 2026, according to a company announcement for investors. The results will cover the third quarter of 2026, following the quarterly results that showed a decline in margin and growth in nuclear revenue. The company said the results would be released before the market opens that day. It also listed a call to discuss third-quarter results on its investor events calendar, on the same date as the quarterly figures are released. The call is scheduled to begin at 8:30 a.m. U.S. Eastern time on November 4, 2026, according to Solstice's events and presentations page.