United States v. Hughes Tool Co.

The government brings this action to enjoin Hughes Tool Company from acquiring Byron Jackson, Inc., a wholly owned subsidiary of Borg-Warner Corporation, upon the grounds that such acquisition will violate section 7 of the Clayton Act ( 15 U.S.C. § 18 ). This court earlier denied a preliminary injunction but ordered the defendants to maintain the acquired business separate and apart from other operations until final disposition of the case.

BACKGROUND

Hughes Tool Company (Hughes) is a Delaware corporation with its principal manufacturing facilities in Houston, Texas. Borg-Warnér Corporation (Borg-Warner) is a Delaware corporation with general offices in Chicago, Illinois. Byron Jackson, Inc. (BJ) is a Delaware corporation maintaining general offices in Long Beach, California.

Prior to 1972, Hughes’ business operations had been conducted by the Oil Tool Division of Howard Hughes’ privately owned corporation. However, in 1972, the oil tool division was taken over by a new corporation, Hughes Tool Company, the defendant herein, all of whose stock is now publicly owned.

Hughes is primarily engaged in the development, manufacture and sale of rotary bits used in drilling…