Closing Time: Hell, High Water, And Insights From The Delaware Chancery Court Decision In Desktop Metal v. Nano Dimension

Published: 2025-04-15 10:13:10 ET NNDM

Cross-border M&A deals frequently present unique issues and strategic closing considerations for transaction parties to navigate—including national security approvals. In a recent Delaware Chancery Court decision, these issues intersected when the court was forced to weigh national security-related approval conditions imposed by the Committee on Foreign Investment in the United States ("CFIUS") against the buyer's stringent contractual closing obligations.

On July 2, 2024, Nano Dimension, an Israeli company, agreed to acquire Desktop Metal, a U.S. company that makes industrial-use 3D printers which produce specialized parts for missile defense and nuclear-related applications. Unsurprisingly, closing the acquisition was contingent upon receiving CFIUS approval due to the sensitive nature of Desktop Metal's operations. At the conclusion of its review period, CFIUS required Nano Dimension to enter into a national security agreement ("NSA") outlining several post-closing operational restrictions imposed upon the parties, which Nano Dimension refused to accept as a result of new leadership that opposed the acquisition. Desktop Metal subsequently filed suit to force Nano Dimension to enter into the NSA to obtain CFIUS approval and consummate the acquisition, which the court granted.

Key Findings and Takeaways:

The Nano Dimension and Desktop Metal ruling serves as a crucial reminder of the complexities involved in cross-border mergers subject to CFIUS approval and provides valuable insights for practitioners and transaction parties navigating the CFIUS process.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Mr Brian Weimer Sheppard Mullin Richter & Hampton 333 Hope Street, 48th Floor Los Angeles California 90071 UNITED STATES Fax: 2136201398 E-mail: [email protected] URL: www.sheppardmullin.com