Steel group Arcelor's planned merger with Mittal Steel could face legal action from jilted suitor Severstal.
Severstal insists it signed a 'binding agreement' with Arcelor
The Russian group has said it is "reviewing its options" after losing the takeover battle, hinting it may sue Arcelor for breach of contract.
Arcelor agreed a merger with Severstal to fend off an unsolicited bid from Mittal but has now accepted an improved £18.5bn ($34bn, 27bn euro) Mittal bid.
Arcelor chief executive Guy Dolle is to step down once the merger is completed.
Mr Dolle, who vehemently opposed Mittal's initial offer, has said that Arcelor should nominate a new chief executive to run the enlarged company - Arcelor Mittal - once the merger process is over.
Luxembourg-based Arcelor backed the deal following marathon nine-hour talks on Sunday and the decision will be put to shareholders later this month.
If approved, the move will merge the world's two largest steel companies, creating a powerful global giant.
Lakshmi Mittal, Mittal Steel's chief executive, said the new company would be a dominant force in the steel industry.
"Arcelor Mittal will be the undisputed sector leader, a global giant with a footprint in every major region, producing an extensive range of products for the world's most sophisticated customers," Mr Mittal - who will become president of Arcelor Mittal - told reporters at a press conference in Luxemburg.
Mittal's pursuit of Arcelor initially provoked fierce political opposition in several European countries where the firm has sizeable workforces.
Job guarantees and other promises made by Mittal Steel about future investment had now made the deal "acceptable", French President Jacques Chirac said.
Guy Dolle is to stand down as Arcelor chief executive
"The unfriendly offer became a friendly one and therefore acceptable, thanks to the reaction of the French and Luxemburg governments," he said in a French television interview.
The BBC's business editor, Robert Peston, called the deal between Arcelor and Mittal "a very significant moment".
"European governments, in particular France and Luxembourg, were very unhappy about this deal but shareholders wanted it to happen," he explained.
"It is a victory for shareholder capitalism and a defeat for what many regard as the continental state-intervention way of organising economies."
The accepted bid could still face a number of hurdles - the first from Russian group Severstal.
Severstal said it was "very surprised" it had not been invited to discuss its own revised offer or respond to Mittal's latest bid.
It is not clear whether Severstal will attempt a fresh offer.
The deal is a personal triumph for Lakshmi Mittal
"We have a legal, binding merger agreement that the board of Arcelor entered into," the group said in a statement.
"(Arcelor) has unanimously supported it to date, consistently affirming the industrial logic, the better business sense and the higher value creation behind our agreement on several occasions."
"We are now reviewing all of our options."
Arcelor suggested that Severstal could be in line for a £140m ($175m) break-up fee and vowed to maintain joint ventures with the firm.
A question mark also remains over the future of Dofasco, the Canadian group Arcelor bought earlier this year for $4.2bn.
While Arcelor wants to hold onto the group, Mittal wants to sell it to German industrial conglomerate ThyssenKrupp.