Section 8 of the Clayton Act was enacted to provide a bright line rule prohibiting interlocking directorates which could otherwise facilitate coordination among competitors.
“As originally proposed, this deal would have violated that core principle – creating a cozy relationship among competitors.” “Robust competition depends on competitors being actually independent of each other – that’s what Section 8 requires,” said Principal Deputy Assistant Attorney General Renata Hesse of the department’s Antitrust Division. The revised agreement will provide that ICAP will not own any part of Tullett Prebon after the transaction and will have no right to nominate a member of Tullett Prebon’s board of directors. Given that ICAP and Tullett Prebon would continue to compete after the transaction, the department had serious concerns that ICAP’s ability to nominate a Tullett Prebon board member would create an interlocking directorate in violation of Section 8 of the Clayton Act. An interlocking directorate is where one person – or an agent of one person or company – sits on the board of directors of two competitors.Īs originally structured, the transaction would have resulted in ICAP owning 19.9 percent of Tullett Prebon and having the right to nominate one member of Tullett Prebon’s board of directors. (Tullett Prebon) and ICAP plc addresses the Department’s concerns that the transaction would violate Section 8 of the Clayton Act by creating an interlocking directorate. The Department of Justice announced today that the restructuring of the $1.5 billion transaction between Tullett Prebon Group Ltd.
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