The deal for Czechoslovak Group (CSG) to buy Vista Outdoors’ ammo unit could have hit another roadblock with the federal government.
Senator John Kennedy (R-LA) has sent a letter to Treasury Secretary Janet Yellen, who chairs the Committee on Foreign Investment into the United States (CFIUS). CFIUS is currently reviewing the deal between the US-based Vista Outdoors and Czech Republic-based CSG. The Republican Senator. says he is deeply concerned for national security. He has urgently urged the Treasury Department to reject the deal. His concern is rooted in the potential for a foreign company to control a significant 70{ebf8267f808eac43d24742043db51eeeb004db6334271e1bb6fe8c21c7925753} of all primers on the market if the deal is allowed to go through, a scenario that could have serious implications for our nation’s security, according to Sen. Kennedy.
The Senator is concerned that CSG’s market share on primers will hurt ammunition supplies to the U.S. military and state and federal law enforcement agencies. Sen. Kennedy claims that CSG has dealt with US foreign adversaries, including China. He is concerned that the deal could give China influence over the supply of primers. The Senator did not highlight any deals that CSG has with any enemy of the United States.
“Further complicating this matter, questions have arisen in recent weeks related to CSG’s relationships with China. It appears the company has taken actions to obscure its past relationships with China and insist it has no current relationships with our adversaries,”the senator continued.
“For these reasons, I request CFIUS to carefully examine national security concerns of the proposed acquisition, specifically concerning the potential impact of the transaction on the U.S. military and law enforcement’s reliable access to an affordable supply of primers and ammunition, and the company’s attempts to obfuscate its relationship with China,” Kennedy concluded.
Sen. Kennedy isn’t the only member of Congress sounding the alarm on the sale. Sen. J.D. Vance (R-Ohio) has also written a letter to CFIUS asking it to block the sale for many of the same reasons, including CSG’s being linked to the Kremlin. Rep. Clay Higgins (R-LA), who sits on the House Homeland Security Committee, has also echoed some of the same talking points as his Republican colleagues. However, none of the Congress members could give any examples of deals with China or any other adversaries. The only dealings with any foreign adversaries that AmmoLand News has been able to turn up were another division of CSG selling of mining equipment to a private company inside Russia before any sanctions were in place. This sale wasn’t a military sale and was before the invasion of Ukraine.
CSG has not remained silent in the face of these accusations. The company has publicly stated that it has never engaged in business with China, Russia, or any other US adversary. CSG asserts that it is currently a major supplier of ammunition to NATO countries in Europe and has been supporting Ukrainian forces with ammo to counter the Russian invasion. The company also highlights that some of its high-level US-based employees hold federal security clearances, a privilege that would not be granted if CSG did business with Russia, China, or any US non-ally. This response from CSG provides a different perspective on the issue.
“Considering the above, any speculation about the CSG’s connection to the Putin regime should be considered nonsense. We nevertheless explicitly note that CSG has never had any ties to Putin’s regime, and there is no reason why we would have such ties, given that we have never supplied any defense products to Russia. Past export of our civilian products – namely trucks for the mining industry – was negligible, and after the outbreak of Russian aggression against Ukraine, it was unilaterally terminated by us. CSG has also never violated any arms embargo and has never been investigated for doing so, let alone sanctioned,” CSG responded to Sen. Vance.
Some believe that the misinformation is an attempt to block the deal and force the sale of Vista Outdoors to MNC Capital Partners, an investment firm that includes former Vista board member Mark Gottfredson. After the CSG deal was announced, MNC Capital Partners offered to buy all of Vista Outdoors for $3 billion through a stock buyout. Vista Outdoors rejected the investment company’s bid and continued with the agreement it reached with CSG to buy the ammunition division.
The CFIUS review process takes 45 days, but it could be extended to 60 days if the committee feels it needs more time. This extension isn’t likely. The deal has already gone through one review period, but it agreed to voluntarily withdraw its initial filing and refiled on March 28 to give the CFIUS more time to review the sale. If the CFIUS approves the deal, Vista Outdoor’s shareholders will vote on the sales agreement with CSG on May 16.
About John Crump
John is an NRA instructor and a constitutional activist. Mr. Crump has written about firearms, interviewed people of all walks of life, and on the Constitution. John lives in Northern Virginia with his wife and sons and can be followed on Twitter at @crumpyss, or at www.crumpy.com.
