John Kennedy doesn’t like what he sees at all.
A little-noticed business deal is going to change the landscape for hunters and the military.
Now John Kennedy is raising hell over this scary deal involving a crucial American industry.
Major American ammunition manufacturer being sold to a foreign company
Vista Outdoor struck a $1.96 billion deal to sell its outdoor products business, The Kinetic Group, to Czechoslovak Group (CSG) – a Czech conglomerate with a robust arms division. The Kinetic Group owns ammunition brands like Remington, Federal, CCI, Speer, Alliant Powder, Estate Cartridge, and Hevi-Shot. That makes Kinetic the largest American producer of ammunition. Vista Outdoor is focusing on its line of camping and outdoor products moving forward.
The Committee on Foreign Investment in the U.S. (CFIUS), led by Department of Treasury Secretary Janet Yellen, needs to approve the deal because of the national security implications of selling an American company to a foreign competitor. Republicans like U.S. Senator John Kennedy (R-LA) have sounded the alarm on the deal but CSG is confident they’ll get the Yellen-led committee to give them the green light. Purchasing The Kinetic Group would give the Czech company control of 70% of the world’s primer market – a critical component of manufacturing ammunition.
Vista Outdoor’s actions have raised eyebrows during its attempt to sell The Kinetic Group. Texas-based Investment Firm MNC Capital Partners offered to buy Vista Outdoor and The Kinetic Group but multiple offers from the company to buy Vista Outdoor and The Kinetic Group were rejected. Capital Texas-based private equity firm JDH Capital offered over $2 billion for Kinetic – a higher bid than CSG – but the offer was rebuffed. Vista claimed that JDH pulled the offer at the last minute because of a legal dispute with MNC.
MNC Capital Partners Managing Director Mark Gottfredson – a former Vista Outdoor board member – said that the ammunition maker should stay in American hands. The company was prepared to outbid CSG but Vista wanted to stick with its promise to CSG.
“We strongly believe that Vista Outdoor should remain American-owned,” Gottfredson told FOX Business. “Our all-American offer doesn’t require approval from CFIUS, and we feel it is the best deal for shareholders, for national security and for consumers.”
Vista Outdoor insisted that its deal would keep the ammunition made in the USA.
“Vista Outdoor ammunition is Made in the USA today, and our ammunition will be Made in the USA after the transaction closes,” a Vista Outdoor Spokesperson told FOX Business. “The U.S.-based management team and CSG are jointly committed to U.S.-based production and the continued supplying of ammunition to American consumers, law enforcement and military partners.”
The fate of the sale of The Kinetic Group to CSG is in the hands of the CFIUS. Kennedy, U.S. Senator J.D. Vance (R-OH), Representative Clay Higgins (R-LA), and sheriffs’ group voiced opposition to the deal. Kinetic produces ammunition that’s used by law enforcement and the military. Kennedy said that CSG has sold weapons to China in the past.
“Senator Kennedy is concerned about Czechoslovak Group’s potential acquisition of Vista Outdoors because it could make the U.S. Army reliant on a sole U.S. contractor for ammunition and U.S. law enforcement agencies more reliant on foreign providers of primers and ammunition,” an aide from Kennedy’s office told FOX Business. “Furthermore, CSG’s attempt to blur its ties to Russia and China is deeply troubling.”
CSG purchased Fiocchi Munizioni, the largest manufacturer of ammunition in Italy. Fiocchi has manufacturing plants in Little Rock, Arkansas, and Ozark, Missouri. The Italian company is one of the largest European producers of primer. CSG could virtually corner the global primer if The Kinetic Group deal gets approved.
Selling off the largest ammunition maker in the United States to a company based in Eastern Europe should be a red flag. Giving one company control of 70% of the world’s primer market is a national security risk. It remains to be seen if Yellen and the CFIUS has the sense to stop it.
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