Honeywell spinoff Solstice to continue M&A playbook post separation

By Utkarsh Shetti

Oct 8 (Reuters) - Solstice Advanced Materials will continue to look for merger and acquisition opportunities as a standalone company, its CEO David Sewell said on Wednesday, seeking to emulate parent Honeywell's HON.O deal-making strategy.

The producer of specialty chemicals, which is set to start trading independently on the Nasdaq from October 30, was spun off from Honeywell as part of its separation into three independent companies.

"We'll look for bolt-on M&A opportunities in the markets and technologies that are aligned and adjacent to where we're at today," Sewell told Reuters in an interview ahead of the company's inaugural investor day.

Honeywell CEO Vimal Kapur has made a string of acquisitions since he took over in 2023, while also shedding non-aligned assets to simplify the business.

Solstice is expected to follow that playbook as its independent structure will help increase focus on capital allocation and strengthen its balance sheet.

Solstice's refrigerants & applied solutions business logged sales of $2.7 billion in 2024, while the electronic & specialty materials unit, which makes electronic materials for semiconductors, did sales of $1 billion.

Sewell expects the vast amounts of capital flowing into data centers for artificial intelligence to drive growth at the business.

"We think that really positions us well to grow along with the market," Sewell said.

He shrugged off any potential impact from the Trump administration's tariffs as a result of local manufacturing, adding higher costs on raw materials is "very manageable."

"It's really not of substance in the impact of our business."