Czechoslovak Group CSG

I have a number of posts up on the plans of the Czechoslovak Group (CSG) to purchase the ammunition producing portion of Vista Outdoor (Kinetic Group) as well as on a competing bid. In today’s Outdoor Wire, Jim Shepherd has a very interesting post about behind-the-scenes moves to sabotage the CSG acquisition of The Kinetic Group.

Yesterday, a pair of letters from CSG’s top management to a United States Senator and the CEO of the National Sheriffs Association seem to indicate there’s been a sophisticated PR campaign being waged against the CSG/Kinetic deal.

The letters address misconceptions, if not outright falsehoods, regarding the deal. They also raise another unanswered question: who’s trying to stop this deal?

Some Wall Street observers are saying- not for attribution- they suspect CSG’s being forced to address a disinformation campaign designed to drive the Vista Board of Directors to a possible alternative deal from MNC Capital Partners.

The US Senator is Sen. J. D. Vance (R-OH). In a letter to Treasury Secretary Janet Yellen dated January 24th, Vance asserts in the letter that he has reservations about the CSG purchase of the Kinetic Group due to CSG’s “alleged ties to the inner circle of Russian President Vladimir Putin.” These alleged ties are not connected to CSG’s ammunition business but rather its Tatra heavy truck component.

CSG CEO and owner Michal Strnad addressed these concerns in a letter to Sen. Vance yesterday.

He said, in part:

Senator, with all due respect, your 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. 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….

any speculation about the CSG’s connection to the Putin regime should be considered nonsense. We nevertheless explicitly note that CSG has never had any ties to Putin’s regime and there is no reason why we would have such ties, given that we have never supplied any defense products to Russia. Past export of our civilian products – namely trucks for the mining industry – was negligible, and after the outbreak of Russian aggression against Ukraine, it was unilaterally terminated by us. CSG has also never violated any arms embargo and has never been investigated for doing so, let alone sanctioned.

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.

It now appears that Sen. John Kennedy (R-LA) who usually is more thoughtful is jumping on the anti-CSG bandwagon. Yesterday, he sent a letter to Sec. Yellen questioning whether CSG had ties to China and added his concerns about a foreign company controlling so much of the market for primers. He goes on to add that this sale of the Kinetic Group to CSG could make Olin’s Winchester as the sole source supplier to run the Army’s Lake City Ammunition Plant.

I’m with Jim Shepherd on this. There seems to be a concerted effort to torpedo the CSG purchase of the Kinetic Group and you have to wonder why. The Czechs have become valued Nato partners and have great reason to hate the Russians. Moreover, there is little publicly available information about MNC who is the other suitor for the Kinetic Group.