The high-stakes battle over Nano Dimension’s acquisition of Desktop Metal has taken a dramatic turn, with Delaware’s chancellor issuing a 48-hour ultimatum for the Israeli high-tech electronics firm to secure national security clearance or risk further legal fallout.

The ruling, handed down late Monday, rebukes Nano Dimension for failing to follow through on its $183 million agreement to acquire Desktop Metal, a defense contractor specializing in 3D printing components for missile defense and nuclear weapons. The acquisition, initially agreed upon in July, was priced at a 27.3% premium over Desktop’s stock value at the time.

Court Rebukes Nano for Stalling the Deal

In a fiery legal showdown that included a two-day trial from March 11-12, Chancellor Kathaleen St. J. McCormick ruled that Nano Dimension materially breached the merger agreement. Despite counterclaims, the court found no fault on Desktop Metal’s part.

"Regardless of who bears the burden, the equities favor specific performance," McCormick wrote in her opinion. "Nano’s failure to take necessary actions has created uncertainty for customers, suppliers, and employees, including the '700 families' who work for Desktop."

The court’s ruling orders Nano to secure regulatory approval from the Committee on Foreign Investment in the United States (CFIUS) within 48 hours. If the acquisition is not completed by March 31, Desktop Metal can unilaterally extend the deadline.

Behind the Legal War: Shareholder Pressure and a Corporate Takeover

The lawsuit, originally filed in December, accuses Nano Dimension of deliberately obstructing the deal under pressure from its second-largest shareholder, Murchinson Ltd..

The court documents paint a damning timeline of events:

• Nano initially pursued Desktop Metal aggressively, even interfering with a potential acquisition by rival Stratasys Ltd., convincing shareholders to vote down the deal.

• Murchinson opposed the acquisition, pushing for a bankruptcy-based buyout instead.

• By Dec. 6, Murchinson secured four of Nano’s 10 board seats, and weeks later forced the remaining six directors to resign.

• After the takeover, Nano allegedly halted efforts to obtain CFIUS approval, with the court stating: “The timeline is damning.”

McCormick’s ruling notes that Murchinson’s opposition to the deal was clear, public, and relentless.

Desktop Metal’s Financial Struggles Add to the Pressure

Adding another layer of tension, the court acknowledged that Desktop Metal is in dire financial straits.

"As Desktop told CFIUS, operating the company became 'increasingly challenging' as its cash balance fell below $10 million by December 2024," McCormick wrote, emphasizing the escalating risk of bankruptcy.

While Nano failed to prove Desktop Metal breached its “no bankruptcy” commitment, the judge remarked that "the evidence is quite close."

What Happens Next?

With Nano Dimension on the clock, the coming days will determine whether the acquisition proceeds or if further legal battles—and financial turmoil—await both companies.

Meanwhile, Desktop Metal issued a statement saying it "intends to move expeditiously toward closing as soon as possible, while continuing to serve its customers, employees, and stakeholders."

Nano Dimension has not yet responded to the ruling.

Legal Teams in the Battle

Representing Desktop Metal Inc.:

• Quinn Emanuel Urquhart & Sullivan LLP: Michael A. Barlow, Veronica B. Bartholomew, Michael B. Carlinsky, Andrew J. Rossmann, Christopher D. Kercher, Jesse A. Bernstein, Peter H. Fountain, Kaitlin P. Sheehan, Heather K. Christenson, Jonathan E. Feder, and Jianjian Ye.

Representing Nano Dimension Ltd. and Nano US 1 Inc.:

• Abrams & Bayliss LLP: A. Thompson Bayliss, E. Wade Houston, Florentina D. Field, and Caleb R. Volz.

• Vinson & Elkins LLP: Michael C. Holmes, Jeffrey Crough, and Andrew E. Jackson.

• Paul Weiss Rifkind Wharton & Garrison LLP: Jason M. Halper, Sara E. Brauerman, Lewis R. Clayton, Jeffrey J. Recher, and Ariane Rockoff-Kirk.

The case has now become one of the most contentious legal fights in the high-tech defense and 3D printing industries, with the future of the acquisition hanging in the balance.