Novolipetsk Steel (NLMK), a Russian Steel producer, has terminated its agreement to buy DBO Holdings from The Carlyle Group.
On 12 August 2008, DBO Holdings and NLMK entered into a merger agreement providing for the sale of DBO Holdings to NLMK for $3.53 billion. DBO Holdings filed a lawsuit on 15 October against NLMK in New York federal court as a result of NLMKs failure to close the transaction in a timely manner, in breach of the express terms of the merger agreement between the parties. That suit is pending. DBO Holdings intends to aggressively pursue all legal remedies at its disposal to enforce its rights under the merger agreement, and fully expects to prevail in its pending lawsuit against NLMK.
We are disappointed that NLMK has chosen to breach its obligations under the merger agreement, says Daniel A. Pryor, Carlyle managing director and vice chairman of JMC. However, JMC is an exceptional company with superb employees and a proven management team. We see many opportunities to continue building and strengthening the business. It has been a privilege to work with the company over the past three years, and I look forward to continued involvement.
D.C.