Pending Sale of Colt to CZ

News stories posted this morning here in the US and in the Czech Republic indicate there is a pending sale of Colt to CZ.

Prague / Uherský Brod (Uherskohradišťsko) – CZG Group – Česká zbrojovka Group SE (CZG) continues negotiations on the acquisition of a 100% stake in the American company Colt Holding Company LLC. The time limit for exclusivity to complete the negotiations has been extended to the end of January. This follows from the CZG regulatory announcement. Colt is the world’s leading manufacturer of firearms.

“Both parties have reached a general agreement on the basic commercial parameters of the transaction. Negotiations are now continuing with discussions on the technical parameters, regulatory approval requirements and contractual terms of the transaction,” said CZG.

According to them, the conclusion of the final documentation is expected by the end of January, subject to the completion of negotiations, transaction documentation and obtaining the necessary approvals of the competent authorities of both parties. “Once all the above conditions have been met, regulatory approval will be required before the transaction can be finally settled. However, despite significant progress in the negotiations, there is no guarantee that the transaction will be completed,” CZG warned.

According to Fio banka analyst Jan Raška, CZG’s original intention was to complete the negotiations in 2020, so everything is now being postponed by about one month. “In our opinion, a possible acquisition of Colt would increase Česká zbrojovka’s chances of gaining a foothold in the American segment of the armed forces,” Raška said. Colt is one of the world’s leading designers, developers and manufacturers of firearms. It has been supplying civilian and military customers and armed forces in the United States and other countries for more than 175 years.

The CZG Group – Česká zbrojovka Group SE reported record revenues of five billion crowns in the first three quarters of last year. This was a year-on-year increase of 10.2 percent, mainly due to a higher number of weapons sold due to high demand, especially in the United States. The holding recorded a year-on-year increase of 10.2 percent in the first nine months of 2020 also in the case of operating profit, which amounted to CZK 815.7 million. In 2019, the CZG holding reported sales of CZK 5.96 billion and a net profit of CZK 734 million.

The group manufactures small arms for the armed forces, personal defense, hunting, sport shooting and other civilian uses. It sells them under the CZ (Česká zbrojovka) brand, which has a history of more than eighty years, and also under the CZ-USA, Dan Wesson, Brno Rifles or 4M Systems brands. In addition to Česká zbrojovka, the group includes CZ-USA, 4M Systems and CZ Export Praha. The holding also holds a minority stake in Spuhr i Dalby, a Swedish manufacturer of optical mounting solutions for weapons. The group employs approximately 1,650 people in the Czech Republic, the USA and Germany.

Potential sale also reported here.

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