U.S. lawmakers are concerned about the national security implications of a potential sale of American ammunition maker Vista Outdoor to Czechoslovakgroup (CSG), a foreign arms company. The pending $1.91 billion sale would occur in a context in which ongoing arms shortages already exist due to increased demand from warfare between Russia and Ukraine and Israel and Hamas.
Details of the Deal
In October 2023, Minnesota-based company Vista Outdoor announced the agreement with CSG to sell its Company, including the prominent ammunition brand Remington, to CSG, which is based in Prague. CSG currently supplies munitions and military equipment to Ukraine.
Opposition to the Sale
U.S. lawmakers, including Senator J.D. Vance and former Secretary of State Mike Pompeo, have noted concerns about CSG’s links to China and Russia. Pompeo and Vance have asked the Committee on Foreign Investment in the U.S. (CFIUS) to block the sale to CSG.
National Security Concerns
Critics of the sale claim that a foreign entity should not be allowed to control the bulk of the U.S. small-arms ammunition supply. Republican Senator John Kennedy from Louisiana suggested that the sale may compromise national security if CSG is not able to provide reliable access to affordable ammunition.
CSG’s Perspective
CGS’s CEO Michal Strnad defended the sale of Vista Outdoor to his Company, arguing that the deal bolsters strategic industrial relations between the Eastern European Czech Republic and the U.S. Strnad points out that both countries are NATO allies.
Historical Context
This case’s high level of scrutiny is due to geopolitical tensions and a global shortage of gunpowder. Generally, the sale of a U.S. company to another NATO ally would not attract much criticism. In this case, however, due to the global context and the industrial product in question—ammunition—the national security implications have brought much attention to the sale. Lawmakers and some U.S. citizens fear the impact of foreign influence on America’s ammunition supply chain.
Rival Bids
Vista Outdoor has attempted a sale before. In 2022, Texas-based MNC Capital Partners attempted to buy Vista’s firearms business but was outbid by CSG. In January 2024, Vista board member Mark Gottfredson resigned from the board. MNC offered $3 billion for Vista’s entire portfolio, including the firearms division, outdoor business, binocular maker Bushnell, and motocross brand Fox Racing.
Board Member Turned Investor States Concerns
Gottfredson stated, “It needs to be held in American hands,” expressing his view as a former board member and current potential investor.
Shareholder Meeting
Vista is considering MNC’s bid and will discuss the prospect at a shareholder meeting in June.
Confidence in CFIUS Approval
While CFIUS reviews the potential sale to CSG, Vista, and CSG, it expresses confidence that the Committee will approve it.
Treasury Department’s Stance
During the CFIUS review, the Treasury Department did not comment on the sale but continued to state its commitment to safeguarding national security.
CSG’s Background
After the Cold War, CSG first started as a surplus military goods supplier in Eastern Europe. The Company then expanded to manufacture munitions and defense equipment sales. The target markets for CSG have remained NATO countries.
Expansion and Current Operations
After Russia invaded Ukraine, CSG grew substantially as an arms supplier to Kyiv. The Company has also purchased a stake in an Italian small-arms company.
Comparisons to Other Foreign-Owned U.S. Companies
Other notable ammunition companies selling products in the U.S. are owned by foreign entities, including SIG Sauer, Glock, Taurus, and Colt. Foreign entities own all and operate in the U.S.
CSG’s Past Dealings with Russia and China
Lawmakers and other stakeholders have expressed concern about CSG’s past dealings with China and Russia. In past years, the Treasury CFIUS committee has required divestment from Chinese companies of U.S. interests, including property ownership near national security landmarks, and required Chinese Company ByteDance to divest of the popular social media app TikTok.
