US Gunmaker Colt To Be Acquired By European Firearm Manufacturer CZ
American firearm manufacturer Colt is reportedly in the process of being acquired by a renowned European gunmaker Česká Zbrojovka (C.Z. or Czech Armory). In November 2019, Czech Armory informed its shareholders that it was preparing to acquire a 100% stake in Colt Holding LLC, which owns Colt Manufacturing Company LLC.
Czech Armory makes weapons for personal defense, armed forces, hunting, and sport shooting. Its products include C.Z. 75 pistols, BREN rifle series, and C.Z. Scorpion EVO 9mm carbine pistol. The firm has manufacturing facilities in the Czech Republic and the United States.
Earlier disclosure statements indicated that the deal was “ready for execution by the end of 2020.” However, the exclusivity period was extended and will now expire by the end of January 2021.
“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 CZ Group.
CZG, however, warned that despite reaching an agreement with Colt and meeting regulatory requirements, “there is no guarantee that the transaction will be completed.”
Česká zbrojovka Group S.E. performed well on the market in 2020, reporting revenue of about $466,485 million (CZK 5 Billion) in the first three quarters. These earnings marked a 10.2% increase from the past year. The growth was fueled by firearm's increased demand, especially in the U.S.
Contrarily, Colt had filed for chapter 11 bankruptcy in 2015 but emerged in early 2016. Many U.S. gunmakers are struggling despite the record number of gun purchases. The supply chain disruption left them unable to meet the demand, while customers could not complete purchases because of COVID-19 closure orders and delays in concealed carry permit processing.
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