Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Tullett Prebon/ICAP transaction restructured following interlocking directorate concern, (Jul 14, 2016)

By Michael Menzhuber, J.D., LL.M.

Tullett Prebon Group Ltd. and ICAP plc are restructuring their $1.5 billion transaction in order to address the Department of Justice’s concern that the transaction would violate Section 8 of the Clayton Act by creating an interlocking directorate, the agency announced today.

Tullett Prebon and ICAP are both headquartered in London, England, and operate in the United States. Tullett Prebon is a leading provider of voice, hybrid, and purely electrical brokerage services across asset classes. After the transaction, ICAP will be called NEX Group Ltd. and will focus on providing electronic trading platforms for numerous asset classes and associated market data and services.

The transaction, as originally structured, 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. Given that Tullett Prebon and ICAP would continue to compete after the transaction, the Justice Department had serious concerns that ICAP’s ability to nominate a Tullett Prebon board member would create an interlocking directorate. An interlocking directorate is where one person, or an agent of that person, sits on the board of directors of two companies.

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.

During the investigation, the Justice Department cooperated with the United Kingdom’s Competition and Markets Authority, the Australian Competition and Consumer Commission, and the Competition Commission of Singapore.

Companies: ICAP plc; Tullett Prebon Group Ltd.

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