DNOW Faces Securities Class Action Over MRC Global Merger Failures

The complaint filed by Hagens Berman alleges that DNOW management misled shareholders in proxy materials by downplaying integration risks associated with MRC Global’s ERP system. On November 5, 2025, just one day before the merger closed, executives characterized previous software issues at MRC Global as isolated incidents while promising that a new state-of-the-art system would optimize supply chain performance.

These assurances unraveled on February 20, 2026, when DNOW revealed that persistent software flaws had caused severe operational bottlenecks and significant revenue declines. The company admitted that the system architecture was fundamentally flawed, necessitating unexpected capital expenditures and forcing a delay in the firm's 2026 financial guidance. Following the disclosure, DNOW stock plummeted 19% in a single trading session. Reed Kathrein, the partner leading the investigation, stated the firm is examining whether leadership knowingly minimized these technical failures to secure shareholder approval for the deal.