The opinion of the court was delivered by: FULLAM
This is a private antitrust action under 15 U.S.C. § 26, arising out of the sale of 21% of the stock of United Nuclear Corp., the plaintiff, by the Olin Mathieson Chemical Corp. to the defendant, Combustion Engineering, Inc. On July 1, 1968, plaintiff filed its complaint alleging that this acquisition violated section 1 of the Sherman Act, 15 U.S.C. § 1, and sections 7 and 8 of the Clayton Act, 15 U.S.C. §§ 18, 19.
On July 1, 1968, after hearing, I entered a temporary restraining order which prevented Combustion Engineering from exercising its rights as a shareholder of United Nuclear. This order, as later modified on July 8, 1968, and September 20, 1968, remains in effect.
It has been stipulated that the hearing on plaintiff's request for preliminary injunction be treated as the final hearing. The record has since been supplemented by certain depositions and stipulations, the most recent of which was filed on May 7, 1969.
After reviewing the entire record and considering the proposed findings of fact and conclusions of law submitted by counsel, I now enter the following
1. Plaintiff, United Nuclear Corporation, is a Delaware corporation with headquarters at Elmsford, New York, and offices, manufacturing facilities, and laboratories in New York and in other states.
2. Defendant, Combustion Engineering, Inc., is a Delaware corporation with principal offices in New York City, and offices, manufacturing facilities and other facilities in various states and foreign countries.
3. Combustion Engineering transacts business within the Eastern District of Pennsylvania.
4. Both United Nuclear Corporation and Combustion Engineering, Inc. are engaged in interstate commerce.
5. United Nuclear Corporation has 4,561,158 shares of common stock issued and outstanding. On June 27, 1968, Combustion Engineering, Inc. bought 978,403 shares of United Nuclear Corporation from Olin Mathieson Corporation. This acquisition of approximately 21% of United Nuclear Corporation's stock made Combustion Engineering, Inc. the largest single stockholder of United Nuclear Corporation.
6. Since the end of World War II, efforts have been underway to develop the necessary technology to utilize nuclear energy as a means of producing electricity. By the early 1960's, experimental nuclear power plants were producing electricity for retail consumption, but production costs were too high in comparison with existing fossil-fuel plants.
8. From 1953 through June of 1967, orders have been placed for nuclear power plants as set forth in Appendix A.
9. In addition to the orders referred to in Finding 8 above, 14 utilities have announced plans to build nuclear generation plants. The average capacity of these proposed plants is 904.3 MW (e).
10. In general, it takes about four to six years from the time a nuclear power plant is ordered until it is commercially operable.
11. In nuclear power plants, the energy source is uranium. Steam to operate the generators is produced in a large and complex apparatus known as the Nuclear Steam Supply System (hereinafter the NSSS unit).
12. Two basic types of NSSS units are now on the market: the boiling water reactor and the pressurized water reactor. The technical differences between these two types of reactors are not significant to this action.
13. The main element of an NSSS unit is the pressure vessel or reactor. Uranium fuel assemblies, control rods, and various other instruments are housed in the reactor, and surrounded by water. External to the reactor are the components necessary to transfer the energy output of the reactor to the more or less standard generating and transforming equipment.
14. The nuclear fuel for the reactor is a uranium compound which is formed into pellets and placed inside tubes which are approximately one-half inch in diameter and 12 to 14 feet in length. These tubes are arranged in the reactor in clusters to form a unit called a fuel assembly. Thirty to forty thousand tubes are generally required, and the exact number in each cluster varies greatly from one reactor to another. Since the tubes are immersed in water for long periods, they must be made of corrosion resistant material. At present, a zirconium alloy is most commonly used for these fuel tubes.
15. The hardware portion of each NSSS must be individually designed to meet the requirements of the ordering utility. As a result, it is necessary in each case to design and engineer the uranium compound itself, the number and arrangement of fuel tubes, and the location of the fuel assemblies within the reactor.
16. The fuel which is placed in the NSSS unit initially is referred to as the core. During the operation of the unit, the fissionable uranium isotope, U (235), is depleted (this process is referred to as "burn-up"), and efficiency-reducing materials known as poisons are developed. After 12 to 18 months of operation, the NSSS unit is shut down, approximately one-third of the fuel assemblies are replaced, the fuel assemblies are relocated, and the poisons withdrawn. Thereafter, one-third of the fuel is replaced annually for the life of the reactor. The replacement fuel assemblies are referred to as reloads or reload batches, and the process of fuel replacement and reorganization is termed fuel management.
17. The estimated useful life of a nuclear generating station is approximately 30 years. A complete station of the 800 to 1000 MW (e) variety, including land, buildings, hardware, and the initial core, costs about $150,000,000. The NSSS unit alone costs approximately $30,000,000 to $40,000,000; the initial core costs about $25,000,000 to $30,000,000; and each reload batch costs about $8,000,000 to $10,000,000. Based on present cost levels, fuel costs projected over the life of the reactor will total between $250,000,000 and $300,000,000 for each reactor.
18. Nuclear fuel assemblies ("fabricated fuel") are the end-products of a highly sophisticated and complex manufacturing process. The separate steps of this process are as follows:
(a) Uranium deposits must be located and mining operations undertaken.
(c) Yellowcake is then purified and converted into uranium hexafluoride gas, UF (6).
(d) The uranium hexafluoride gas is then put through an isotopic enrichment process, which is a gaseous diffusion method of increasing the percentage content of the fissionable U (235) isotope. In general, this process increases the U (235) content from.07% to the range of 2.5% to 3.2%.
(e) The enriched uranium hexafluoride is then converted into a uranium dioxide power, UO (2).
(f) The uranium dioxide powder is then machine pressed into a pellet form, and the pellets are then ground to the specification for a ...