The Federal Trade Commission (FTC) has acted to resolve antitrust concerns related to a stock purchase agreement between Beretta Holding S.A. and Sturm, Ruger & Co. Inc. The proposed consent order aims to prevent any anticompetitive entanglements between the two major firearm manufacturers.

Under the terms of the consent order, Beretta, a subsidiary of Upifra S.A., is prohibited from appointing or nominating individuals to Ruger’s board of directors unless those individuals are independent of Beretta. This measure addresses allegations that the stock purchase deal would create an illegal interlocking directorate arrangement, violating Section 8 of the Clayton Act.

The FTC's enforcement action highlights the risks associated with interlocking directorates, which can facilitate anticompetitive coordination and the sharing of sensitive information between competitors. The Deputy Director of the FTC’s Bureau of Competition emphasized the importance of maintaining competition among gunmakers to protect consumer rights.

Beretta's proposed acquisition of Ruger stock aimed to increase its investment to 25% of Ruger’s outstanding shares, which would have allowed Beretta to appoint two members to Ruger’s board. The FTC's order effectively blocks this arrangement, ensuring that the independence of Ruger is preserved and reducing the risk of collusion.

The consent order also includes provisions requiring Beretta to notify the FTC at least 15 days in advance of any board appointments and prohibits any financial relationships with independent directors that could compromise their fiduciary duties. The public has 30 days to comment on the proposed consent agreement before it is finalized.