Smith Judgment Said Not to Affect Merger
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Settlement of a $205-million patent infringement judgment against Smith International will not allay the U.S. Justice Department’s concerns over the anti-competitive nature of the pending merger between Baker International and Hughes Tool Co., government and company officials said Wednesday.
At Baker’s annual shareholders meeting Wednesday, Chairman E. H. Clark Jr. said a Justice Department negotiator advised him that if Hughes sharply cut the awarded damages to a size that would be less devastating to its archrival Smith, “it would neither help nor hurt” the department’s attitude toward the merger.
Charles (Rick) Rule, acting assistant attorney general, concurred that although the viability of Smith, which has entered Chapter 11 bankruptcy reorganization, is a factor in determining the extent of competition in the oil services industry, Smith’s survival is not key to approving the Baker-Hughes merger.
“Hughes and Baker together would claim about 50% of the rock bit market even with Smith (in the market),” Rule said.
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