Starboard presses Solstice to cut overhead by about $100 million
Key Facts
Activist investment firm Starboard Value is calling on Solstice Advanced Materials to cut overhead by about $100 million, Reuters reported on October 20, 2026, citing the Financial Times. Starboard has taken a stake in the advanced materials company, according to the report, pressing for changes to spending and execution in its core businesses. Its demands include a focus on refrigerants and nuclear energy, alongside the proposed reduction in corporate overhead. Reuters cited the newspaper as saying the investor wants Solstice to "cut its overhead by about $100 million." The demands follow the cancellation of an agreement to acquire Element Solutions, which Solstice had presented as a way to increase its exposure to electronics and artificial intelligence infrastructure.
Solstice's corporate expenses rose to $54 million in the second quarter of 2026, according to the company's earnings disclosure filed with the U.S. Securities and Exchange Commission. Those expenses totaled $46 million in the corresponding period of 2025, according to the comparison provided in its earnings release. Solstice attributed the increase to the additional costs of operating as an independent public company, which it identified as the reason for the rise in this expense category during the period. The company reported second-quarter net sales of $1,148 million, up 11% from the corresponding period a year earlier. Its adjusted earnings before interest, taxes, depreciation and amortization margin was 25.3% in the same quarter, according to the financial disclosure.
The agreement to acquire Element Solutions, announced in July 2026, carried a value of about $14.5 billion, according to Solstice's statement on the deal. The announced value included the net debt Solstice was to assume under the acquisition agreement, alongside the value of the transaction itself. Outlining its rationale for the acquisition at the time, the company said combining the businesses would increase its exposure to the electronics sector, which it described as high-growth. It identified artificial intelligence infrastructure as one of the areas where it sought to strengthen its presence through the proposed transaction. Solstice then announced on August 27, 2026, that it had mutually agreed with Element Solutions to terminate the acquisition agreement, following shareholder feedback on the deal.
Under the mutual termination, neither party to the canceled acquisition agreement incurred a termination fee, according to the statement Solstice issued when announcing the decision. The company said in its statement that "neither party is required to pay any fees," specifying the financial terms associated with terminating the agreement. Alongside the cancellation, Solstice's board authorized a share buyback program of up to $500 million. In the same announcement, Solstice reaffirmed its fiscal 2026 net sales guidance of between $4,125 million and $4,185 million. It maintained its adjusted earnings before interest, taxes, depreciation and amortization guidance for the same year at between $1,035 million and $1,055 million, according to the figures in the deal termination statement.
In October 2026, Solstice also announced plans to invest $49 million in expanding its research and development capabilities, according to a separate company statement. It designated its facility in Buffalo, New York, as the site of the planned expansion, as part of the investment to strengthen those research capabilities. The expansion aims to support areas including refrigerants, one of the core businesses where the activist investor called for a focus on execution. Solstice said the expanded capabilities at its Buffalo facility would cover thermal management alongside refrigerants. The company also included advanced energy storage among the areas the planned investment would support, according to its announcement on the research and development expansion.
Looking ahead, Starboard Chief Executive Jeff Smith was expected to disclose the investment on Tuesday, according to the Financial Times report cited by Reuters. The report identified the 13D Monitor Active-Passive Investor Summit as the venue for the investment firm's chief to make the expected announcement. Solstice, meanwhile, said it would release its third-quarter 2026 results on November 4, 2026, according to its earnings date announcement. The results will be released before the market opens that day, according to the company's schedule for its next financial disclosure. Solstice will hold a call to discuss its third-quarter results at 8:30 a.m. U.S. Eastern time the same day, according to the announced schedule.