Credit Suisse AG and Deutsche Bank AG agreed to pay a total of $1.73 billion in cash and financing to settle a lawsuit with Huntsman Corp. over a failed merger — the price of abandoning a deal because of the worsening economy.

Huntsman's plan to merge with Apollo Management LLP was scuttled last year when the banks backed out of funding the deal amid concern that the U.S. economic slump would leave the resulting company insolvent.

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