The Russian steelmaker Novolipetsk Steel (NLMK) has announced that it has signed a settlement agreement with US-based DBO Holdings putting an end to their dispute concerning NLMK's proposed acquisition of US tubular manufacturer John Maneely Company (JMC), which NLMK terminated in November 2008.
Accordingly, the agreement provides for the full mutual release and discharge by NLMK and DBO from their claims arising from the transaction.
Moreover, under the terms of the settlement agreement, NLMK is to pay DBO Holdings a settlement amount of $234 million within four business days of the signing.
As SteelOrbis previously reported, on August 12, 2008, NLMK signed a definitive agreement with a shareholder group including global private equity firm The Carlyle Group and the Zekelman family for the acquisition of JMC for an estimated US$3.53 billion. The acquisition was to be closed by 29 September. Later NLMK failed to close the transaction in a timely manner and, on October 15, DBO Holdings, Inc. filed a lawsuit against NLMK alleging that the Russian steelmaker had breached the terms of its merger agreement. DBO Holdings sought to obtain damages in an amount to be determined by the court, an order to compel NLMK to fulfill its obligations under the merger agreement, and an award of costs and such other relief as the court would grant. In November 2008, NLMK terminated the agreement and plan of merger with DBO Holdings for the acquisition of John Maneely Company, from The Carlyle Group.