DealLawyers.com Blog

The FTC is continuing to enforce the prohibition on interlocking directors in Section 8 of the Clayton Act. This Debevoise alert discusses a recent consent order that provides some guidance on the FTC’s perspective on when Section 8 comes into play.

On September 16, 2026, the Federal Trade Commission (the “FTC”) announced a proposed consent order addressing Beretta Holding S.A.’s (“Beretta”) proposed acquisition of additional shares of Sturm, Ruger & Co., Inc. (“Ruger”). The FTC alleged that governance rights associated with the investment would have created an unlawful interlocking directorate in violation of Section 8 of the Clayton Act.

Under a stock purchase agreement, Beretta sought to both (i) increase its minority position in Ruger and (ii) appoint two directors to Ruger’s board. According to the FTC, Beretta and Ruger compete across multiple firearms product lines, and therefore Beretta’s anticipated role in Ruger’s Board of Directors could have opened an avenue for the exchange of competitively sensitive information between competitors [. . .] The FTC alleges that the Beretta-Ruger agreement created a company-level interlock because it could not guarantee that the Beretta-appointed directors would be independent of Beretta and its affiliates.

The consent order requires 15 day prior written notice to the FTC before any nominee can join Ruger’s Board and details the following independence requirements that any Beretta-nominated director must satisfy:

– Not a Relevant Person or Immediate Family Member: The nominee may not be an employee, officer, director, representative or agent of a “Relevant Person” (i.e., Beretta, its parent or any entity they control) or an immediate family member of a Relevant Person.

– Three-Year Lookback: In the preceding three years, the nominee may not have been (a) an employee, officer, director, representative or agent of a Relevant Person; (b) a recipient of direct or indirect compensation from a Relevant Person; or (c) a partner or employee of a firm that is a Relevant Person’s internal or external auditor.

– No Material Relationship: The nominee may not have a “Material Relationship” with a Relevant Person, anyone within a Relevant Person, or an immediate family member of such a person. A “Material Relationship” is any relationship that would reasonably be expected to impair the objectivity of the nominee’s judgment when serving as a director of Ruger.

In addition to confirming that interlocking directors remain an enforcement priority, the alert highlights other key takeaways — that minority investments and nominating corporations can create issues under Section 8 if the director nominees aren’t sufficiently independent.

– Meredith Ervine