Critical Defense Ownership Review Act
Sponsored By: Representative Khanna, Ro [D-CA-17]
Introduced
Summary
Mandatory prior review of large investments in companies that supply the Department of Defense. This bill would require the Pentagon to vet any proposed deal that gives an investment company 25 percent or more ownership or control of a major defense supplier.
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Bill Overview
Analyzed Economic Effects
2 provisions identified: 1 benefits, 0 costs, 1 mixed.
Triennial M&A review of defense firms
If enacted, the Assistant Secretary of Defense for Industrial Base Policy would review mergers and acquisitions involving major defense suppliers every three years. The review would assess firms' financial health and whether M&A has affected supply of essential goods or services for the Department of Defense. The Secretary must send a report to congressional defense committees covering the prior three fiscal years and actions taken to mitigate risks. The first report would be due by December 31, 2027, and then every three years afterward.
New DoD review for big defense investments
If enacted, the bill would bar an investment company from finishing any deal that gives it 25% or more of a major defense supplier or control unless the Department of Defense reviews it first. Parties to such deals would need to file a premerger notification to DoD consistent with section 857 of the FY2024 NDAA. DoD would review at least six factors, including national security effects, competition for DoD contracts, risks to critical suppliers or technologies, and the financial health of the supplier and the investor. The bill would also define key terms like “control,” “covered transaction,” “investment company,” and “major defense supplier” to make clear which deals must follow these rules, and the Secretary must send a written report on the DoD review to the FTC or the Justice Department within 30 days of the notification.
Sponsors & CoSponsors
Sponsor
Khanna, Ro [D-CA-17]
CA • D
Cosponsors
There are no cosponsors for this bill.
Roll Call Votes
No roll call votes available for this bill.
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