Earlier this year, the Czech-based Česká zbrojovka Group (CZG) acquired Colt Manufacturing, the world-famous American gun maker that had helped popularize the revolver, in a deal worth around $220 million and 1.1 million in shares of the Czech firm’s stock. At the time of the deal Lubomír Kovařík, president of CZG said “this merger is a strategic step for both companies.”
It would allow CZG to expand its global customer base, and also increase its production capacity in the United States and Canada. That could allow CZG to compete for U.S. military contracts, which often have a “Buy American” requirement. Colt, which was founded more than 175 years ago, had been a key supplier to the U.S. military until 2013, when it lost the contract to supply the M4 carbine after reliability problems became a serious concern. Colt still remains and exclusive supplier to the Canadian military.
Colt Come Back
The deal could also result in a serious comeback for Colt, and put the combined CZG and Colt in the same league as Smith & Wesson, the leader in the American firearms industry. CZG is aiming to double its revenue to $1 billion or more and that will require taking on the likes of Smith & Wesson Brands, as well as Sturm, Ruger & Company and other popular American firearms makers.
While it has sold Czech-made firearms in the U.S. for years, CZGs products have consisted of hunting rifles, semi-automatic pistols, and modern sporting rifles such as its civilian semi-automatic version of the CZ Bren 2. With the Colt brand, the Czech-based company now has a more significant foothold in the U.S., and that could include military contracts.
Under U.S. law, only companies manufacturing firearms in the U.S. can complete for such contracts, and by owning Colt, CZG can now enter its firearms in the U.S. military procurement competitions.
“Colt is an important step in realising our vision of getting to 1 billion (euros) in revenue by the end of 2025,” CZG’s Chairman Jan Drahota told Reuters in an interview at the company’s Prague headquarters. “We … will be thinking how to make sure the brand is even bigger than it is now and introduce it to wider (markets). It is a privilege, but it is also pressure on us.”
Prior to the acquisition of Colt, about 66 percent of CZG’s sales still came from the U.S., and that included contracts with law enforcement as well as consumer sales in the civilian market. To increase its sales, CZG plans to introduce and produce non-Colt products in the U.S. and to upgrade the primary Colt facility in West Hartford, Connecticut.
Currently, CZG has some 2,000 employees in Canada, the Czech Republic, Germany and the United States.
Peter Suciu is a Michigan-based writer who has contributed to more than four dozen magazines, newspapers and websites. He regularly writes about military small arms, and is the author of several books on military headgear including A Gallery of Military Headdress, which is available on Amazon.com.