The controversial takeover of a leading U.S. ammunition business by a Czech conglomerate might hit a new hurdle: the Justice Department’s antitrust lawyers.
The Czechoslovak Group’s purchase of Vista Outdoor’s ammunition business, first announced last October, has been under a lengthy national security review by the Committee on Foreign Investment in the U.S., an interagency panel led by the Treasury Department, which can bar foreign purchases on national security grounds.
But in recent weeks DOJ antitrust lawyers have been meeting with third parties, including law enforcement groups concerned that the deal will lock up the U.S. market for primer, the key ingredient in bullets, according to three people with direct knowledge of the matter. A letter from the National Association of Police Organizations sent last week to Attorney General Merrick Garland also says the DOJ is looking at the deal.
The DOJ’s antitrust inquiry is in the early stages according to one of the people, and it couldn’t be learned whether it will lead to a formal probe of the deal.
The Biden Administration has made antitrust enforcement a cornerstone of its economic policy, investigating industries across the economy for illegal monopolies, and a formal probe of the deal would be an escalation of that approach. This year the Justice Department has filed sprawling lawsuits against Ticketmaster and Apple and the FTC has sued to block major grocery and consumer goods mergers.
The DOJ’s antitrust inquiry is in the early stages according to one of the people, and it couldn’t be learned whether it will lead to a formal probe of the deal.
The Biden Administration has made antitrust enforcement a cornerstone of its economic policy, investigating industries across the economy for illegal monopolies, and a formal probe of the deal would be an escalation of that approach. This year the Justice Department has filed sprawling lawsuits against Ticketmaster and Apple and the FTC has sued to block major grocery and consumer goods mergers.
The CFIUS review could potentially conclude before the end of the month, though it could also be extended. If CFIUS blocks the deal, the DOJ doesn’t need to take any action even if it has antitrust concerns. But if CFIUS does clear the acquisition the DOJ would need to either negotiate with the companies to delay closing the sale, pending an investigation, or go to court to get an injunction.
Spokespeople for CSG and Vista declined to comment. Spokespeople for the DOJ and CFIUS did not respond for comment.
Vista currently controls a majority of the U.S. market for primer, which ignites the charge and makes a pistol or rifle able to fire. Winchester, a gun maker and the other major manufacturer, makes primer only for its own use. CSG, meanwhile, controls Italian company Fiocchi, which imports primer to the U.S. and is currently building a domestic production center in Arkansas.
DOJ is trying to determine whether the acquisition would leave the bulk of the U.S. primer market in the control of a single company and eliminate a potential competitor to Vista.
Vista is not a household name, but its brands are, spanning from water bottle company CamelBak to Bell bike helmets and Remington bullets.