Czechoslovak Group raises offer for US ammunition maker Kinetic to $2bn

Czechoslovak Group (CSG) has raised its bid for Kinetic, one the largest US makers of small arms ammunition, as it hopes to fend off a rival bidder in a politically charged takeover battle.

Vista Outdoor, Kinetic’s parent company, on Monday said privately held CSG had raised its offer by $40mn to $2bn. Vista, whose board had previously recommended the deal, said it remained fully committed to CSG.

Vista has also received an offer from Dallas-based investment firm MNC Capital Partners, which wants to take over the whole of Vista, including its outdoor sports equipment business, for $3bn. Another recent offer for Kinetic, which owns the Remington ammunition brand, backed by Donald Trump donor Jeffery Hildebrand, was withdrawn last week.

Vista noted CSG’s latest bid for Kinetic, which mostly supplies ammunition for guns and rifles used by hunters and law enforcement, also increased the cash payment to Vista shareholders by 12.5 per cent from its previous offer.

Since it was announced last October, CSG’s offer has triggered a political backlash in Washington, led by Republican politicians who are trying to prevent regulatory approval of the Czech company’s bid on the grounds that foreign ownership could threaten domestic security.

Prague-based CSG is central Europe’s largest ammunition maker, and also owns two munition factories in the US that it acquired as part of its 2022 takeover of Fiocchi, an Italian group.

Critics of the deal have also raised concerns over the potential impact of the global ammunition shortage on availability of products in America. CSG is among the arms groups helping the Czech government-led western initiative to buy ammunition for Ukraine.

The Czech group has pledged Kinetic’s products will be sold in the US market.

Vista on Monday said “CSG brings a strong commitment to US manufacturing and our American workforce and deep expertise in supply chain excellence, ammunition manufacturing and support for Nato and allied nations”.

CSG said it would not comment further after raising its offer for Kinetic.

Its Kinetic bid must still be approved by the US Committee on Foreign Investment. The regulatory review is due to close this week, which would then allow Vista’s shareholders to meet and vote on the Kinetic takeover on July 2.

The company’s chair and owner, Michal Strnad, wants to complete the largest ever Czech purchase in the US to counterbalance CSG’s reliance on government arms contracts with civilian demand in America, where about one-third of adults own a gun.