After an examination of all the evidence in this case as a whole, I believe, as of now, that the effect of the proposed acquisitions may be substantially to lessen competition, or to tend to create a monopoly. A preliminary injunction accordingly was issued to halt such acquisitions until the defendants have filed their answers and a final hearing has been had.
After a preliminary injunction had issued on March 6, 1963 against the defendants to prevent their consummating the acquisitional agreements which form the subject matter of this action, a motion was presented by the defendants and argued on March 11, 1963 for modification of this injunctive order. This was denied on March 13th.
Defendant Ingersoll-Rand asked to be permitted to acquire as a purchaser, one or two of the three companies, namely, Goodman, Lee-Norse and Galis pendente lite. It is clearly set out in the transcript of March 11th starting at page 11:
'The Court: Is this now the ultimate or is this merely a step in the direction which you had intended or projected?
'Mr. Burns: This is one --
'The Court: By the original agreement?
'Mr. Burns: This one of the steps along the way. Then the second part of the motion is that if the Court agrees to allow us to acquire either Goodman or Lee-Norse, then a second step is whether the Court would also allow us to acquire Galis, which there was no showing they were in competition with the other two. We want to ask for two things at one time. The first hurdle is whether we can have either Lee-Norse or Goodman.
'The Court: Without Galis?
'Mr. Burns: Without Galis, Now, if the Court decides that one in our favor, there comes the second question. Maybe the Department's views on that would not be as strong as they are on the first two. We'd like to keep them separate.
'The Court: Then you are asking for a modification to the extension that you may acquire either Goodman or Lee-Norse?
'Mr. Burns: Lee-Norse, right.
'The Court: But not necessarily.
'Mr. Burns: Not necessarily Galis, no.
'The Court: But in any event you would like, in addition if at all possible, the last mentioned company?
'Mr. Burns: Yes.
'The Court: Now, does this then mean that you will eventually wish to acquire any of the other two companies'
'Mr. Burns: We would like to have that determined by the Court of Appeals because our contention is --
'The Court: By the Court of appeals?
'Mr. Burns: Yes.
'The Court: You would not want this Court to now make a determination on one alone?
'Mr. Burns: Well, we want the Court to make determination.
'The Court: And be bound by it?
'Mr. Burns: No, this would only be pendente lite. We are not asking the Court to review anything except to hold the door open.
'The Court: An interim request?
'Mr. Burns: That's right, and the Government can still oppose the whole case at a final hearing?
'The Court: I appreciate that, but I am talking about you, yourself. You do not intend to be bound by an order that will permit the acquisition of only one?
'Mr. Burns: No, Your Honor.'
The defendants frankly state their position. The present merging of either Goodman or Lee-Norse with or without Galis is not the defendants' final contemplated purpose. This is but one step desired towards the fulfillment of the acquisition of all three companies. Defendant, Ingersoll-Rand, desires now to begin that acquisition while it furthers this existing litigation. Without saying so, it renews its previous urging, that if acquisition is, at the final hearing, determined to be in violation of Section 7, that divestiture be employed as the eventual effective remedy.
Here is a straightforward assertion that the defendants will be satisfied only with the acquisition package as a whole. But this is the plan. Ingersoll-Rand has available money for investment. It believes that the coal industry has a promising future and that its production vehicle must be by continuous mining equipment. It is evidently proceeding in the contemplated package acquisition, according to the plan as suggested in its Wearly Report.
Its goal is not to slowly develop a production project of coal mining equipment, but rather to emerge one which is full-bodied and fully going. It plans to accomplish this by ingesting two stalwarts and a robust producer in the closely related area. Acquisition of any of these, less three, does not fulfill the plan.
As of now the record points to the acquisition of the three companies as being in violation of Section 7 in that it may substantially lessen competition or tend to create a monopoly. But this must ultimately be determined by full and final hearing; and if it is finally determined to be in violation of the Clayton Act, a modified order, as of this time, allowing a single step towards consummation of the package plan will have been offensive in law and in equity.
As to the matter of permitting acquisition subject to divestiture correction, any of the parts of the package presents the same problem only in a lesser degree. I re-affirm here for any of its parts, what I said in the opinion about possible divestiture of the whole acquisition package.
Because the defendants desire a modification of the injunction order to start putting into effect the merger, which must first be finally, legally adjudicated, I deem it to be at the present time, a premature action, and therefore have denied the defendants' motion for modification of the preliminary injunction.