Kennedy demands CFIUS investigation before U.S. loses ammunition production to arms dealer with China, Russia ties

WASHINGTON - Sen. John Kennedy (R-La.) today called upon the Biden administration's Committee on Foreign Investment in the United States (CFIUS) to investigate the Czechoslovak Group's (CSG) proposed acquisition of U.S. ammunition producer Vista Outdoor Sporting Products.

Kennedy wrote Treasury Secretary Janet Yellen, Chair of the CFIUS, about concerns regarding the deal because it would lead to an unprecedented consolidation in the global ammunitions market.

"I write to draw your attention to potential national security concerns arising from the proposed acquisition of Vista Outdoor's Sporting Products business ('Vista Sporting Products') to Czechoslovak Group ('CSG'), a foreign arms dealer with ties to China that has been recently acquiring key suppliers of ammunition and primers used by the U.S. military and law enforcement," Kennedy wrote.

The senator highlighted three main concerns about the acquisition, including that it would give CSG immediately control over nearly 70% of production capacity for primers in the western world. That means that the U.S. Army could become reliant on a sole U.S. contractor for ammunition and U.S. law enforcement agencies would become more reliant on foreign providers of primers and ammunition.

"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.

Background:

• On Oct. 16, 2023, Vista Outdoor announced an agreement to sell its Sporting Products business to CSG for $1.9 billion.

• The proposed acquisition is the latest example of unprecedented consolidation in the global ammunition market occurring in Europe. For example, Beretta acquired the Ammotec division of RUAG International in March 2022, and CSG gained a majority stake investment in Fiocchi Munizioni in Nov. 2023.

• The proposed acquisition must undergo shareholder and regulatory approvals, including a national security review, by CFIUS.

• In Dec. 2023, Vista Outdoor and CSG disclosed that they received antitrust approval from U.S. antitrust regulators. However, the proposed acquisition did not happen within the initial 45-day CFIUS review window.

The full letter is available here.

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