Conservative lawmakers lead objections to Vista’s deal to sell Federal ammunition to Czech firm

More conservative lawmakers are putting pressure on Treasury Secretary Janet Yellen to quash a Czech company’s bid for Anoka-based Federal and other ammunition brands owned by Vista Outdoor.

Sen. John Kennedy of Louisiana became the latest Republican to send a letter to Yellen in her capacity as chair of the Committee on Foreign Investment in the United States (CFIUS), which must approve the Prague-based Czechoslovak Group’s plan to buy Vista’s Kinetic unit.

The mounting criticism — which also includes objections from a national sheriff’s group, Rep. Clay Higgins of Louisiana and Sen. J.D. Vance of Ohio — comes as Vista heads toward a critical shareholder vote on May 16 and as Vista and the Czechoslovak Group (CSG) withdrew and refiled their CFIUS application to get an extension. It also comes as false internet rumors abound, so much so that Jason Vanderbrink, head of Vista’s Kinetic Group, took to YouTube to address them.

“We have always and will continue to proudly prioritize ammo orders and shipments for our U.S. military and local, state and federal law enforcement agencies,” Vanderbrink said on the video. He also assured viewers that CCI, Federal, Hevi-Shot, Remington and Speer ammunition would remain American-made.

In a $1.9 billion deal, Vista has agreed to sell to CSG the Kinetic Group, which includes the Federal, Remington, CCI, Hevi-Shot and Speer ammunition businesses. The rest of the company, composed of outdoors product businesses, would then become a new publicly traded company called Revelyst.

There is a competing $3 billion bid for the entire company by an all-U.S. investment group called MNC Capital, led by former Vista board member Mark Gottfredson.

MNC Capital, which has made several offers for Vista, has said selling an American ammunition group is a national security issue because the company holds law enforcement and military ammunition contracts.

A deal with CSG also would concentrate the production of primers with one company. Primers are critical components of ammunition that ignite the propellant and may be the most complex piece of any cartridge. Sources close to MNC Capital say if the CSG deal goes through, it would give the resulting company 70% of the primer market worldwide.

Because of the reliance on Vista for ammunition, the National Sheriffs’ Association raised objections to CFIUS earlier this month.

“At this time of heightened global demand, any disruptions in access to affordable and reliable American-made ammunition and primers will hurt sheriffs across the country,” the association said in a letter to CFIUS.

Higgins, Kennedy and Vance in their letters alluded to connections between CSG Group and Russia or China.

CSG owner and CEO Michal Strnad said in an open letter to Vance that the senator’s “assessment of us was profoundly mistaken.”

“CSG is one of the most important private supporters of the Ukrainian military effort, a country to which we have supplied much-needed weapon systems dating back to 2018, well before the outbreak of open Russian aggression,” Strnad said in the letter. “Since the Russian army’s attack on Ukraine, we have supplied the Ukrainian Army — with the help of the government of the Czech Republic and other NATO countries, including the U.S. — over a hundred pieces of heavy equipment and, most importantly, hundreds of thousands of pieces of artillery ammunition, of which we are one of the most important European manufacturers.”

CSG also is a supplier for the U.S. military and partners with U.S. defense contractors such as General Dynamics and Raytheon.

“Considering the above, any speculation about the CSG’s connection to the Putin regime should be considered nonsense,” Strnad wrote in his letter. “We understand that the sale of major producers of small caliber ammunition to a foreign company, even if it is a company from a NATO member state that is a close ally of the U.S., attracts well-deserved attention. In today’s global world, however, it is not important which allied country the buying company is based, but what its track record is and what value it can bring to the American ammunition manufacturers associated in the Kinetic Group.”

On Tuesday, David Štěpán, CSG board member and CEO of its ammunition business, responded to the sheriffs’ association, reiterating the defense industry ties and adding that several of CSG’s businesses hold top NATO security clearances, which would not be possible if it had close ties to Russia or China.

In a filing with the Securities and Exchange Commission on March 28, Vista said officials remain confident they can meet all the required closing conditions and regulatory approvals, including CFIUS.

CSG received CFIUS approval for its acquisition of Italian ammunition company Fiocchi Munizioni in 2022. That deal included the Fiocchi America business, which required CFIUS approval.

A major concern involving any large deal revolves around front-line employment. CSG has said that there would be no major changes to employment if they acquire the sporting products group.

“CSG has always been supportive of workers, managers and leaders who are committed to their jobs and the company’s vision,” Štěpán said in an email. “We are a technology-based industrial group that understands the importance of a quality workforce and a strong leadership team.”