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Combination with Element Solutions would boost Solstice’s role as key supplier of chipmaking inputs

Honeywell spin-off Solstice Advanced Materials is in talks to merge with Element Solutions, potentially striking a deal that would create a $27bn speciality chemicals giant less than a year after breaking off from the industrial conglomerate.

Discussions between the two companies over a merger of equals are ongoing, but a deal could come together as soon as this week, said people familiar with the talks. They warned that a formal agreement had not been reached and talks could still fall apart.

The deal, which is likely to be mostly stock-based and include some cash, would allow Solstice to take advantage of its strong share price performance since breaking away from Honeywell eight months ago. The stock is up 75 per cent, giving Solstice a market value of $12.7bn at Thursday’s close.

The potential merger would create a market leader in the advanced materials sector, with a combined enterprise value of roughly $27bn, including debt.

A combination with Element would boost Solstice’s role as a supplier of advanced chipmaking materials. Solstice makes everything from polymers and performance fluid to process materials used by industry, while Element focuses on materials used in electronics, semiconductors and the automotive sector.

In its latest earnings update in April, Element highlighted robust demand from the “high-end electronics market”, pushing net sales for the first quarter to $840mn, up 41 per cent on the same period last year. 

Shares in Element have increased 77 per cent over the past year, giving it a market capitalisation of $10.6bn. Element has struck a series of smaller deals in recent years to bolster its presence in the semiconductor supply chain, including buying Micromax, a maker of conductive pastes for electronics, for $500mn last year.

Solstice and Element did not immediately respond to requests for comment.

Solstice chief executive David Sewell told investors in February that future dealmaking was “certainly on the table”.

“What we’re really grateful for is to have such a strong balance sheet, and since our spin we’ve really started to develop a robust M&A pipeline,” said Sewell on a first-quarter earnings call.

The transaction would come amid a boom in dealmaking, with a record 47 transactions valued at more than $10bn in the first half of the year, helping to push global dealmaking volume to $2.8tn, according to LSEG.

Solstice’s public listing was the first part of Honeywell’s complex break-up. The $135bn industrial giant last month split into two publicly traded companies: one focused on aerospace and the other on automation.

Sarah Thompson, Kanika Sood and Emma Rapaport

Jul 5, 2026 – 2.52pm

The world’s most valuable artificial intelligence company, Anthropic, wants to buy at least 1.4 gigawatts of capacity from Australian data centres that will cost as much as $US15 billion ($21.6 billion) to build, far exceeding previous estimates of its needs.

A tender issued confidentially by Anthropic, and obtained by Street Talk, shows it is aiming to start using at least 1 gigawatt of this capacity by the end of next year, after opening its Australian office earlier this year.

The documents state the Dario Amodei-led company’s base case was to find a “long-term partner” that could build a large-scale 1.4GW-plus data centre campus. And it is willing to partake in the development risk.

“We recognise that a likely outcome is identification of an optimal development partner without a fully developed site – in that scenario, we envision jointly identifying and developing a site that meets our requirements,” the request-for-proposal stated.

The RFP, which landed in offices of CDC Data Centres, AirTrunk, NextDC, Iren and Stack among other players, culminated in an initial round of proposals at end of March. A handful of parties were invited to on-site meetings in Canberra in early April, when Amodei was in town to meet

As of Sunday, Anthropic was said to be at least six weeks away from making a final decision, with expectations it could split the deal into four or five smaller contracts instead of signing up with just one data centre landlord as was its base case.

Should it go down this route, Infratil-owned CDC Centre is expected to come out with the lion’s share at about 500MW, sources said.

An Anthropic spokeswoman declined to comment.

The tender documents offer a rare glimpse into what Anthropic – which was valued at $US965 billion ($1.4 trillion) in its Series H raising in May, outstripping rival OpenAI’s valuation – expects of its data centre partners. Both companies are working towards initial public offerings.

The RFP laid out an 11-point checklist for Australian data centre bosses to pitch their credentials on.

Top of this list was “financial capabilities”, where Anthropic wanted to know how a data centre landlord – who stands to earn billions in revenue from the deal – would go about securing the $US12 billion to $US15 billion in debt and equity needed for the project. And how this financing would be underwritten, given Anthropic – despite its status as the most valuable AI company – is still “non investment-grade” according to credit agencies.

Next, it wanted the full details on the applicant’s land bank, including if they could house four or more buildings without being in a residential area or in a school’s backyard.

From here, the RFP’s criteria drilled into specifics of the applicant’s track record. Anthropic asked for one-page summaries on every Australian data centre that company has built to date exceeding 200MWs, requesting the fine-print on development and construction timelines, data hall power density and energy details to name a few.

The giant also requested summaries on how an applicant met the energy needs of projects above 300MW. It asked data centres to prioritise providing examples of “on-premises generation or co-development with independent power producers”. Applicants were asked to submit organisational charts with names of key leaders in design and construction.

“[Also provide] current development pipeline and evidence that your business has sufficient capacity and supply chain relationships to deliver a project of this scale alongside existing commitments,” the document said.

Bidders were told to provide preferred and alternative commercial structures – aka how they shall make money; in particular, Anthropic’s solicited feedback around “pricing lock-in across multiple handovers over a multi-year period”.

Lastly, Anthropic sought assurances around security and government affairs expertise.

The beauty parade, revealed by Street Talk last month, comes after Anthropic cut the ribbon on its Australian operations, promised investment in Australian universities, and powered through Canberra earlier this year. Weeks later, it extended access to its vaunted Mythos model to Australian companies, only for the Trump administration to step in and ban foreign sales of the product.

All these events hit front pages across Australia, but details of Anthropic’s data centre capacity purchase contracts have been kept under wraps so far.