POSCO has reached an agreement with Nippon Steel & Sumitomo Metal Corp. to end their prolonged legal dispute, the Korean steelmaker said Wednesday.

Under the agreement, the Korean steelmaker will pay its Japanese rival about 300 billion yen ($2.5 billion) in compensation for its alleged corporate espionage activity.

“The company has sought the settlement so as not to breach the long-term partnership with NSSMC over the past three years,” a POSCO official said.

The two steelmakers have waged legal battles since April 2012 when Nippon Steel sued POSCO both in Japan and the U.S. for stealing its steel-making technology.

POSCO has denied the allegation and countersued NSSMC in Korea back in July 2012.

Shares of POSCO fell by 1.75 percent to 168,500 won on Wednesday.

By Seo Jee-yeon (jyseo@heraldcorp.com)