Report: CZ looks to buy Colt, including Colt Canada

According to financial documents filed in Europe, Czech firearms manufacturer CZ is aiming to purchase Colt. The deal would include all of the Colt Manufacturing Company's assets, including Colt Canada.

Initially, this story broke in the business section of Die Welt, a German newspaper. Earlier this week, the paper ran a story digging into paperwork from CZ. In November of 2020, CZ published financial documents indicating it was working on a deal to buy up another firearms manufacturer, but didn't give much more information than that. Eventually, CZ told journalists from Die Welt that Colt was the intended target.

At this point, the deal hasn't gone through yet, says the newspaper. There could be any number of reasons for that, but it's possible current unrest in the US, coupled with speculation over future gun control legislation, is causing concern for some investors. Remember, CZ is now a publicly-traded company, since early 2020.

The report from Germany indicates CZ is looking to buy up the entire Colt empire, including Colt Canada (formerly Diemaco). Based in Kitchener, Ontario, Colt Canada was founded in 2005 to retain domestic firearms production for the military. Currently, Colt Canada builds rifles and grenade launchers for the Canadian military, as well as police forces and smaller orders for international customers (often in the special ops community). Under CZ ownership, there's no guarantee that would continue. Colt Canada's international reputation for build quality would no doubt work in its favour.

Remember CZ already has a factory in Missouri, and also owns Dan Wesson Firearms, which has a New York plant. If CZ does buy Colt, it could shift production to either of these factories, or stay in its Connecticut facility.

Where did this deal come from?

So where'd this deal come from? Although it could be the world's best-known privately-owned firearms manufacturer, Colt went tough financial times in the past decade. Colt actually went into Chapter 11 bankruptcy in 2015, after losing a government contract to produce M4 carbines in 2013. After re-structuring under Cannae Holdings Inc. ownership, Colt went back into business, but execs continued to make questionable decisions. In September of 2019, the company announced it would no longer sell AR-15 rifles on the civilian market. Considering 2020's record-breaking firearms sales boom in the US, that looks like a poor financial decision. Colt eventually resumed civilian AR sales in mid-2020, but that decision and other unwise moves over recent years have not served the company well.

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