Will Nano Dimension Be Forced to Buy Desktop Metal? Chancery Court Says “Yes”

For the latest updates (as of March 25, 2025), see the end of this article.

Desktop Metal’s future is hanging in the balance. The company, once a major player in the 3D printing industry, is now involved in a legal battle with Nano Dimension (Nasdaq: NNDM) over a failed merger deal. With lawsuits, counterclaims, and regulatory delays, the outcome remains uncertain.

What started as a merger agreement between Desktop Metal and Nano Dimension last July has turned into a legal fight. Desktop Metal is suing Nano Dimension, accusing it of failing to make sufficient efforts to secure regulatory approval. Meanwhile, Nano Dimension argues that the merger conditions have not been met and is fighting to walk away.

To complicate things even more, Nano Dimension is also dealing with internal turmoil. CEO Yoav Stern was ousted from the board by major shareholders, including activist investor Murchinson Ltd., which holds roughly 7.1% of the company’s shares. This shake-up points to deeper tensions within Nano Dimension as it deals with leadership changes and the ongoing legal battle.

Now, the Delaware Court of Chancery will decide whether the merger must proceed, be renegotiated, or be abandoned entirely.

Meanwhile, Desktop Metal is already feeling the impact of this uncertainty. On March 18, 2025, the company filed a notice with the Securities and Exchange Commission (SEC) stating that it would not be filing its 2024 financial results on time. The document reported that the company expects lower revenue compared to 2023, along with a reduction in operating expenses due to ongoing cost-cutting efforts amid the merger and litigation disputes. That raises a big question: How does this all end?

If history tells us anything, these corporate disputes often follow similar paths. There are five possible ways this legal battle could end, and each one has happened before in a high-profile corporate dispute.

1. Complete the Merger—à la Elon Musk & Twitter

One possible outcome is that Nano Dimension is forced to complete the acquisition, whether it wants to or not. This is what happened when Elon Musk tried to back out of his $44 billion deal to buy Twitter.

Musk initially agreed to the purchase, then changed his mind, mentioning concerns about fake accounts. Twitter sued him in the Delaware Court of Chancery, arguing that he had already committed to the deal. Dealing with a difficult lawsuit, Musk gave in and completed the purchase.

The same thing could happen to Nano Dimension if the Delaware court sides with Desktop Metal; it could order Nano Dimension to proceed with the merger, leaving the company with no choice but to take over Desktop Metal, even if leadership doesn’t want to.

2. New Deal at a Lower Price—à la Tiffany & LVMH in 2020

Another scenario involves the two sides reaching a new agreement, possibly at a lower price. This happened with Tiffany and Moët Hennessy Louis Vuitton (LVMH). In 2019, LVMH originally agreed to buy the luxury jewelry brand for $16 billion. But then the pandemic hit, and LVMH tried to walk away, stating that the French government had pressured the firm to reconsider the deal amid economic uncertainty. At the same time, the firm cited financial concerns, claiming that Tiffany’s business was struggling due to Covid-19, with luxury retail sales plummeting and the company no longer worth the original price.

Tiffany sued to enforce the merger, and rather than drag it out in court, both sides renegotiated. The deal eventually went through, but at $15.6 billion.

If Nano Dimension still thinks Desktop Metal is worth buying but wants a lower price, the company might try to renegotiate instead of continuing the deal in court. Desktop Metal might see a lower deal as a safer option instead of risking a court battle that could end with no merger at all.

3. Collapse Due to Regulatory Issues—à la Qualcomm & NXP in 2018

Sometimes, regulators delay a deal long enough so that it falls apart completely. In 2018, Qualcomm planned to buy NXP Semiconductors for $44 billion, but Chinese regulators delayed their approval for two years, partly due to the U.S. and China trade tensions. Eventually, Qualcomm gave up and abandoned the acquisition, paying NXP a $2 billion termination fee.

In Desktop Metal’s case, the Committee on Foreign Investment in the U.S. (CFIUS) still hasn’t approved the deal. Since Nano Dimension is an Israeli company trying to buy a U.S. company, the deal needs government approval. Desktop Metal claims Nano Dimension isn’t doing enough to secure that approval and has sued over it, while Nano Dimension leadership argues that the company is actively working through the process.

If the U.S. government keeps delaying or outright blocks the merger, Nano Dimension could argue that it can’t legally complete the acquisition, giving it a way out without breaking the agreement.

4. Paying a Breakup Fee and Walk Away—à la AT&T & T-Mobile in 2011

Instead of waiting for regulators to decide, Nano Dimension could choose to walk away on its own terms by simply paying Desktop Metal to exit the deal.

In 2011, AT&T tried to acquire T-Mobile for $39 billion, but the U.S. government opposed the deal, claiming it would reduce competition. Rather than continue the fight, AT&T left the merger and paid T-Mobile a $4 billion breakup fee to exit.

Like AT&T, if Nano Dimension really wants out of the deal, the company may decide that paying Desktop Metal a settlement is the less painful option. The only caveat is whether Nano Dimension would have to negotiate an exit price or simply pay the pre-agreed $5 million termination fee if the merger is blocked by regulators or a court order. On the other hand, if Desktop Metal pulls out, it could owe Nano Dimension up to $7.875 million or $6 million if shareholders reject the deal.

5. Winning in Court and Cancel the Deal—à la Xerox & HP in 2020

Finally, there’s the case that Nano Dimension wins in court and doesn’t have to complete the merger at all.

A similar situation happened in 2020 when Xerox tried a hostile takeover of HP. HP resisted every time, arguing that Xerox’s offer “undervalued the company.” Xerox kept pushing but finally gave up, as it could not get shareholder approval.

If Nano Dimension convinces the court that Desktop Metal failed to meet key conditions, or if the court finds Nano Dimension had the right to walk away, the deal might not happen at all. This would leave Desktop Metal in a difficult position.

The trial wrapped up on March 12, 2025, so as of now, Desktop Metal and Nano Dimension are waiting for a court ruling.

Update – March 25, 2025: The Delaware Court of Chancery has ruled in favor of Desktop Metal, ordering Nano Dimension to move forward with the merger. In a decisive opinion issued on March 24, the Court found that Nano materially breached the merger agreement and rejected all of Nano’s counterclaims. As a result, the Court granted specific performance, compelling Nano to sign a national security agreement with the Committee on Foreign Investment in the United States within 48 hours—a key regulatory requirement and the final hurdle before the deal can close. If the merger has not closed by March 31, Desktop Metal now has the right to extend the deadline at its discretion. The ruling is immediately appealable to the Delaware Supreme Court, but unless Nano files an appeal or fails to comply with the CFIUS requirement, the merger appears poised to proceed.

The potential outcomes discussed in this article are based on publicly available information and past business cases. This analysis is not a prediction, nor does it reflect insider knowledge. For the most accurate and up-to-date information, readers should refer to official filings and court rulings.