The opinion of the court was delivered by: COOLAHAN
COOLAHAN, District Judge: The plaintiff in this action on December 30, 1964 filed a complaint in this District against the defendants Aluminium Limited, Alcan Aluminum Corporation and National Distillers & Chemical Corporation wherein it alleged violation of the Clayton Act, Chapter 7 (15 U.S.C. Section 18) the complaint alleges that the proposed acquisition by Aluminium of the Aluminum Division of National Distillers, Bridgeport Brass Metals Division and National Distillers stock interest in Alroll, Inc. and Alplate Inc. would be in violation of the Act.
In addition to the filing of the complaint the plaintiffs obtained from the Court a temporary restraining order which was granted ex parte which enjoined Aluminium Limited from acquiring National Distillers Aluminum Division which acquisition was to be consummated between the parties today, that is to say, January 5, 1965.
The Court granted a hearing on the injunctive phase of this matter on January 4, 1965. All parties and their present witnesses were heard on this date. Affidavits and legal memorandum in addition to the various exhibits and factual testimony was presented to the Court for its consideration. At the date of hearing an application to intervene was made by Scovill Manufacturing Company inasmuch as Scovill held an interest in Alroll, Inc. which was to be purchased by Aluminum conditioned upon the acquisition enjoined by the December 30 order of this Court. Scovill's percentage interest in Alroll, Inc. is the same as that of National.
It appears from the affidavits filed with the Court, the exhibits and the testimony that the Aluminum Division of National was principally engaged in the sheet rolling industry at the semi-fabricating level, and on a non-integrated basis.
This means that National does not control its own source of supply of aluminum ingots but must purchase same from one of the primary producers such as Aluminum, Ltd. While Aluminium may be a primary producer it has never been engaged in domestic competition in the United States on this level of the aluminum industry.
National Contended that - with an exception that I shall later talk of - National contended that in order for its Bridgeport Division to become a profitable enterprise it was necessary to fully integrate backwards, that is to say, secure a position in basic aluminum operations. Efforts were explored to secure this position but it appeared that the costs were prohibitive and all plans taken in this direction proved unworkable and had to be abandoned.
National's primary business is the distillation and distribution of alcohol and alcoholic beverages, although it has diversified into other fields, including metals. In 1961 National acquired Bridgeport Brass Company and hence entered into the metals field. Bridgeport had previously acquired the Hunter-Douglas Aluminum Corporation, which produced a line of venetian blind components known as "Flexalum." In addition Bridgeport fabricates aluminum awning components and siding which it markets under the Wall Master brand through the Brixite Manufacturing Company, which it acquired in 1964.
Aluminum, Limited, is a Canadian corporation and is reputed to be the largest producer of primary aluminum in the world and purportedly accounts for 18.1 per cent of the total free world production of primary aluminum. In 1945, pursuant to the case of United States v. Aluminum Company of America, 148 F.2d 416 (2nd Circuit 1945), the controlling stockholders of Aluminium and Alcoa were ordered to dispose of one or the other shares of stock holdings over a ten-year period, that it stock holdings they had in either Aluminium or Alcoa, thereby breaking the bond of ownership which had previously linked the two giants of the aluminum industry and presumably enabling free competition between the two firms to take place. Since that date, however, Aluminium has not fabricated aluminum in the United States. More recently, however, it 1963 it acquired Central Cable Corporation, a producer of aluminum conductor wire, and Metals Disintegrating Company, a producer of aluminum powder and paste. To date these have been the only areas where Aluminium has competed for the U.S. domestic market.
In 1960 Aluminium, National, Cerro Corporation and Scovill Manufacturing Company entered into a joint venture called Alroll, Inc., and began producing aluminum reroll coil. Of Alroll's 2,000 outstanding shares of capital stock, National, Cerro Corporation and Scovill Manufacturing Company, each owned 333 shares and Aluminium, Limited, owned 1,001 shares.
In 1964 Aluminium and National in a joint venture created Alplate, Inc., to produce aluminum plate. Both National and Aluminium each own a 50 per cent interest in Alplate, Inc.
In the proposed acquisition Aluminium will acquire all of National's interest in Alroll, Inc., Alplate, Inc., The Bricksite Plant at South Kearny, New Jersey, the California Plant of Hunter-Douglas, the Warren Ohio Plant, four warehouses located in Illinois, New Jersey, Georgia and Pennsylvania, and National's 50 per cent interest in Nesco Aluminum Sales, Inc., a warehouse distributor.
On October 8, 1964, National and Aluminium released for public information, in accordance with S.E.C. regulations, the details of the above described acquisition and slated January 5, 1965 as a closing date. Direct correspondence was had with the United States Department of Justice and information and data voluntarily supplied the Government as requested.
The terms of the proposed sale provide for Aluminium to pay National upon closing, cash in the amount of $26,450,617, representing the book value of the liquid assets of Bridgeport's Aluminum Division. The sum of $17,828,304 will be payable over ten years by means of ten non-interest bearing notes of equal tenor to compensate National for the book value of its fixed assets. These fixed assets have a present insured cash value of $23,186,000 and by being conveyed at this book figure, are being sold for less than their actual value because of the deferred non-interest bearing notes used as the method of payment. This would indicate to a great extent the desire of National to rid itself of its admittedly floundering Aluminum Division, which it claims suffered substantial loss during its five years of operations and is currently alleged to be losing $15,000 per day. ...