Beretta, Wall Street clash begins for control of Sturm Ruger & Co

It is a battle on Wall Street for control of Sturm Ruger, the largest firearms manufacturer in the United States, after Italy's Luxembourg-based Beretta Holding group decided to assert its 9.95% stake with which it became the largest shareholder. After initial discussions with shareholders and institutional investors, including the Blackrock and Vangard funds, for a strategic partnership, the group decided to force its hand by deeming the newly appointed board members 'inadequate'. It therefore presented a slate of four directors out of a nine-member board ahead of Ruger's general meeting scheduled for 29 May, a move designed to gain more control over its main US rival Smith & Wesson.

"We have invested in Sturm Ruger, becoming its first shareholder with 9.95%, because we believe it is a company with significant assets in the United States," Pietro Gussalli Beretta, chairman and CEO of Beretta Holding, told "Il Sole 24 Ore". Our intention has always been to seek dialogue with the board of directors to discuss industrial strategies and partnerships to grow the company and the value of the stock, and I have never spoken of a takeover. Unfortunately,' the chairman added, 'the current board members are putting their own personal interests before those of all shareholders, and we hope that our board members can be elected, who would bring a new approach to the board that would favour only the interests of the company and all stakeholders'.

Beretta Holding's nominees include fund representatives William Franklin Detwiler, managing partner of Fernbrook Capital Management; Mark DeYoung, founder and former CEO of Vista Outdoor; Frederick Disanto, CEO of Ancora Holdings; and Michael Christodolou, founder of Inwood Capital Management. The clash comes against a backdrop of declining sales and sharply declining profits for Ruger, 90 per cent below its peak, with shares down 81.5 per cent over the past three years against the Russell2000 stock market index. Ruger's market capitalisation is about $581 million, representing the value of the company.

When Beretta first disclosed its initial 9.95 per cent stake, it stated in a document filed with the New York SEC last October that it wanted to explore 'potential areas of operational and strategic collaboration' with Ruger. The US company, concerned about the growth of the group's share, adopted a plan to make hostile takeover more difficult (poison pills) by diluting the acquiring investor's stake if a predetermined 10% share was exceeded.

Beretta Holding, the famous arms manufacturer founded in 1526, reported revenues of $1.67 billion in 2024 of which 40% in the USA and an Ebitda of €253 million. Its growth by external lines has led it to an audacious acquisition policy with 50 companies controlled by the holding company including the Swiss ammunition manufacturer RUAG Ammotec in 2022. The three divisions of optics, ammunition and weapons make it an integrated group with growing interests in the defence sector, which now accounts for 40% of turnover with investments in technology and research. The traditional civil sector with weapons for sport and hunting continues to play a central role with stable growth rates.