DNOW (DNOW) Merger Proxy Disclosure Case

Attorneys review the case details to decide whether to proceed with a class action.

S.D. Texas

Court

4:26-cv-06261

Case number

08/06/2025

Class period Start

08/05/2025

Class period End

10/02/2026

Lead Plaintiff motion deadline

$DNOW stockholders filed a claim against DNOW for issuing a materially misleading proxy statement ahead of the shareholder vote on its merger with MRC Global Inc.
The proxy's risk disclosures were generic and boilerplate, and did not flag that MRC Global was in the middle of implementing a new ERP system that later caused significant operational and financial problems; once disclosed, DNOW stock fell 19.1% on 02/20/2026 and a further 10.4% on 02/23/2026.
$DNOW stockholders who held shares as of the August 5, 2025 record date can join this case to be notified about potential recovery.
Case Details:

On June 9, 2025, DNOW announced an all-stock merger with MRC Global Inc. valued at approximately $1.5 billion, under which MRC Global shareholders would receive 0.9489 DNOW shares for each MRC Global share held. On August 5, 2025, DNOW filed a Proxy Statement (Form 424B3) and a Registration Statement (Form S-4) with the SEC soliciting stockholder approval of the merger at a special meeting set for September 9, 2025. DNOW's board unanimously recommended the merger.

The Proxy contained several generic risk factor disclosures warning of potential post-merger integration difficulties and unpredictable synergies, but did not specifically disclose that MRC Global was in the process of implementing a new enterprise resource planning (ERP) system that posed known, material risk to the combined company's operations. The merger closed on November 6, 2025.

On November 5, 2025, the day before closing, MRC Global's outgoing CEO disclosed that the ERP implementation had "encountered significant challenges that adversely impacted MRC Global's revenues, profitability, and cash flows" during the third quarter. 

Then, on February 20, 2026, DNOW released fourth-quarter and full-year 2025 results that missed earnings and revenue estimates, reporting a GAAP net loss of $89 million for the year and $147 million for the quarter. 

On the earnings call, DNOW's CEO characterized the MRC Global U.S. ERP project as "fair to characterize as an obstacle," disclosing that the issues were "a much heavier lift than previously known" and had forced the company to route transactions back through legacy DNOW systems and add over 200 field personnel to address customer service problems. 

On this news, DNOW stock fell $3.13 (19.1%) to close at $13.23 on February 20, 2026, then fell a further $1.38 (10.4%) to close at $11.85 on February 23, 2026.

Based on these events, $DNOW stockholders filed a claim against DNOW, alleging the company:
Issued a proxy statement that failed to disclose the known, specific risks posed by MRC Global's ERP system implementation
Relied on generic, boilerplate risk disclosures regarding post-merger integration rather than the actual risk known to the company
Omitted material facts necessary to allow stockholders to cast an informed vote on the merger
Stockholders argue DNOW's proxy misled them about the true risks of the MRC Global merger, causing them to approve a transaction without knowing about integration problems that later caused significant financial harm.

Case Type

US Securities Class Action

Case Status

Attorney Investigation

Alleged Offence

Misleading Statements,

Failure to Disclose

Suspected Party

Directors,

Management

Security Type

Stocks

Trade Direction

Long

Shock Event Date

02/20/2026

Filing date

08/03/2026

Lead Plaintiff Deadline

10/02/2026