Acquisition

12 Months Ended

Dec. 31, 2025

Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract]

Acquisition

Acquisition

In April 2025, the Company acquired 100% of the equity interests in a U.S. solar module manufacturing facility. The total fair value of purchase consideration was $278 million, consisting of $17 million in cash paid at closing, $111 million in notes payable due within 2025, and $150 million in potential contingent consideration. Of the $111 million in notes payable, payments of $33 million and $42 million were made in the third quarter and fourth quarter, respectively, and the remaining amount is expected to be paid in 2026. The contingent consideration is comprised of annual earn-out payments with a final payment due in the sixth post-closing year. Earn-out payments are based on cumulative free cash flow, with no limitation on the total amount, and the final payment is the lesser of $98 million or an amount based on the net liquidation value of the acquired entity at the time payment is due.

The contingent payments are classified as liabilities and measured on a recurring basis at fair value, utilizing the income approach with Level 3 inputs, with changes in the fair value reflected within selling, general and administrative expenses on the consolidated statements of income. Fair value at the acquisition date and as of December 31, 2025 was $104 million and $88 million, respectively, for the annual earn-out payments, with the change in fair value due to changes in key assumptions. Fair value of the final payment at the acquisition date and as of December 31, 2025 was $46 million and $48 million, respectively, with the increase due to interest accretion. Key assumptions include projections for revenue, margins, market prices and discount rates.

The total purchase consideration of $278 million was allocated to the identifiable assets acquired and liabilities assumed based on their estimated fair values at the acquisition date and consisted of the following (in millions):

Inventories	$	41
Property, plant and equipment	167
Accounts payable	(36)
Other net assets (1)	8
Total identified net assets	180
Fair value of purchase consideration	278
Goodwill (2)	$	98

(1)Includes approximately $52 million in other assets and $52 million in other liabilities relating to acquired operating leases for the manufacturing facility.

(2)Goodwill reflects the expected synergies, expanded market opportunities and other benefits from vertically integrating the acquired solar module business into the Company’s operations. The goodwill is not deductible for tax purposes and has been assigned to a reporting unit within the Hemlock and Emerging Growth Business.

For the year ended December 31, 2025, net sales and net loss before tax relating to the acquired business was $258 million and $13 million, respectively. Transaction-related costs were not material to the Company’s consolidated financial results for the year ended December 31, 2025.