The sale of one of the biggest US makers of small arms ammunition to a Czech defence group has won the backing of shareholders in the American company’s owner, ending a takeover battle that triggered fierce opposition from Republican politicians including vice-president-elect JD Vance.
Vista Outdoor stockholders on Monday approved Czechoslovak Group’s offer of almost $2.23bn for Kinetic. As part of a two-step break-up deal that valued Vista at $3.35bn, its sports equipment business Revelyst will be taken over in January by investment firm Strategic Value Partners for almost $1.13bn.
Privately owned CSG made an initial offer for Kinetic in October 2023, a few months after Vista decided to spin off the maker of ammunition brands, including Remington. Although the bid was accepted by Vista’s board, the deal sparked a backlash in Washington, with some Republican politicians arguing that foreign ownership of the company would threaten national security.
It also prompted rival domestic bids by Dallas-based investment firm MNC Capital Partners as well as another US firm backed by oil and gas billionaire Jeffery Hildebrand, a big donor to Donald Trump’s presidential campaign.
While regulators were reviewing CSG’s offer, Republican congressmen accused the Czech company of having business links to countries that present security threats to the US.
Some of the claims were related to CSG having been a campaign backer of Miloš Zeman, the former Czech president who pushed for stronger ties with both Russia and China, and who left office last year. Critics of the deal also raised concerns over the potential impact of a global ammunition shortage on availability of products in America.
Vance warned in January that “we cannot afford for America’s supply of weapons to fall into the wrong hands”. However, the Committee on Foreign Investment in the United States approved CSG’s bid in June.
Like other defence companies, CSG’s revenues have been boosted by the Ukraine war, which has significantly raised demand for its military equipment, ranging from howitzers to tanks and other armoured vehicles. The company has been the key industrial intermediary in a Czech-led initiative this year to buy desperately needed ammunition for Ukraine from non-EU countries, mostly in Africa and Asia.