S 4734

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IN THE SENATE OF THE UNITED STATES

June 10, 2026

Ms. Warren (for herself and Mr. Blumenthal) introduced the following bill; which was read twice and referred to the Committee on the Judiciary

A BILL

To require a review of acquisitions by investment companies involving acquisition of controlling interest of major defense suppliers, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the “Critical Defense Ownership Review Act”.

SEC. 2. REVIEW OF ACQUISITIONS BY INVESTMENT COMPANIES INVOLVING ACQUISITION OF CONTROLLING INTEREST OF MAJOR DEFENSE SUPPLIERS.

(a) In General.—Except with the prior review of the Department of Defense, no investment company shall engage in a covered transaction with a major defense supplier that results in an investment company having a direct or indirect equity interest of at least 25 percent or direct or indirect control of a major defense supplier.

(b) Premerger Notification Requirement.—Parties to a covered transaction as described in subsection (a) shall submit a premerger notification to the Department of Defense consistent with the requirements of section 857 of the National Defense Authorization Act for Fiscal Year 2024 (Public Law 118-31; 15 U.S.C. 18a note).

(c) Department of Defense Review.—The Department of Defense shall conduct a review of each premerger notification submitted pursuant to subsection (b) that assesses, at a minimum—

(1) any impact of the covered transaction on national security and the industrial and technological base, and whether the covered transaction is within the public interest;

(2) the potential effect on competition for Department of Defense contracts and subcontracts, including future programs and technologies of interest to the Department of Defense;

(3) the potential restriction of a supplier, good, or service that is critical to the defense industrial base, critical technologies, or national security;

(4) the potential risks associated with the covered transaction on the financial stability of the major defense supplier and the continued stewardship of critical military capabilities, including any anticipated increased costs to the Department of Defense;

(5) any other factor resulting from the covered transaction that may adversely affect the satisfactory completion of current or future Department of Defense programs or operations; and

(6) the financial stability of the investment management company involved in the covered transaction and an analysis of whether its projected financial plan for the major defense supplier impairs the ability of the major defense supplier to maintain its supply or services to the Department of Defense.

(d) Report to Antitrust Authorities.—Not later than 30 days after the date on which the Department of Defense receives a premerger notification under subsection (b), the Secretary of Defense shall submit to the Federal Trade Commission or the Assistant Attorney General in charge of the Antitrust Division of the Department of Justice, as applicable, a written report on the review conducted under subsection (c).

(e) Definitions.—In this section:

(1) Control.—The term “control” means the power, direct or indirect, whether exercised or not exercised, to determine, direct, or decide important matters affecting an entity.

(2) Covered transaction.—The term “covered transaction” means any proposed merger, acquisition, joint venture, strategic alliance, or investment pending on or occurring after the date of the enactment of this Act.

(3) Investment company.—The term “investment company” means an entity that would be an investment company under section 3 of the Investment Company Act of 1940 (15 U.S.C. 80a-

3) but for the application of paragraph (1) or (7) of subsection (c) of such section.

(4) Major defense supplier.—The term “major defense supplier”—

(A) means any prime contractor or subcontractor that supplies or could supply goods or services directly or indirectly to the Department of Defense or any company with technology potentially significant to defense capabilities; and

(B) includes—

(i) any current prime contractor of a major system (as that term is defined in section 3041 of title 10, United States Code); and

(ii) any current prime contractor, under a contract awarded pursuant to section 3204(a)(1) of title 10, United States Code.

SEC. 3. TRIENNIAL REVIEW OF MERGER AND ACQUISITION ACTIVITY ASSOCIATED WITH MAJOR DEFENSE SUPPLIERS.

(a) Triennial Review.—The Assistant Secretary of Defense for Industrial Base Policy shall triennially review merger and acquisition activity associated with major defense suppliers, including assessing the resulting financial health of these firms and whether resulting mergers and acquisitions have affected the supply of an essential good or service needed to support the Department of Defense’s mission to provide national security and defense.

(b) Triennial Report.—Not later than December 31, 2027, and triennially thereafter, the Secretary of Defense for Industrial Base Policy shall submit to the congressional defense committees a report with the findings of the review conducted for the previous three fiscal years, including a description of the effects of completed mergers and acquisitions on the health of the defense industrial base and actions taken to mitigate any risks identified. <all>