S. 4734

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 4734 Introduced in Senate (IS)]

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119th CONGRESS
2d Session
S. 4734

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

_______________________________________________________________________

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.
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