Is Walther Still Owned by Smith and Wesson?

Introduction

Time to read: 6 minutes

Date: 05/10/23

Smith & Wesson and Walther are two of the most iconic firearms manufacturers in the world. Their relationship has changed over the past several decades, but remains an important one in the world of weapons production. This article will provide a history of the two companies, as well as discuss how their partnership has transformed in more recent times. Smith & Wesson is a renowned American company that has been in the business of producing handguns and long guns since 1852. Walther, on the other hand, is a German company that was established in 1886. When Smith & Wesson bought Walther in 2002, the brand identity of Walther changed in a big way. So let’s investigate the frequently asked question, “Is Smith & Wesson still the owner of Walther?”

History of Smith and Wesson and Walther

To answer this question, we first need to take a step back and look at the histories of both Smith & Wesson and Walther. Each company has been in business for over a century. Smith & Wesson is a legendary American firearms manufacturer that has been in business for more than 160 years. The business is well known for producing top-notch handguns, rifles, and shotguns for use by the military, law enforcement, and civilians. 

Walther, on the other hand, is a German firearms manufacturer that has been around for more than 130 years. The company is renowned for making handguns that are new, reliable, and popular among competitive shooters and law enforcement agencies all over the world. Both companies have a track record of popularity and success. In 1999, Smith & Wesson acquired a 100% stake in Walther, which we will talk about next. 

Overview of Smith and Wesson’s Acquisition of Walther

Smith & Wesson saw the famous pistols made by Walther as a golden ticket to grow in the firearms industry. In 1999, Smith & Wesson, a well-known American firearms manufacturer, acquired Walther, a respected German firearms company. By buying Walther, Smith & Wesson got access to its innovative handgun designs and high quality, which helped it compete better in the global market for guns.

The acquisition involved Smith & Wesson purchasing a 100% stake in Walther, meaning that Smith & Wesson became the sole owner of Walther. This made it possible for Smith & Wesson to run Walther’s business and add Walther’s products to its own line. It also provided Walther with access to Smith & Wesson’s resources and distribution channels, which helped Walther grow its market share.

With its acquisition of Walther, Smith & Wesson ensured that this iconic brand would continue to be a leader in the firearms industry for years to come. But, just like many amazing things in life, there were negative effects for the Walther brand. 

Impact of the Acquisition on Walther’s Brand Identity

The change in focus for Walther after the acquisition had a significant impact on its brand identity. Before being bought out, Walther was known for making innovative and high-quality handguns for the military, law enforcement, and civilian markets. But when Smith & Wesson bought Walther, the company focused more on making pistols for competitions. This shift affected the company’s brand identity.

It didn’t take long before customers felt that Walther had lost some of its liberty as well as its unique identity under the ownership of Smith & Wesson. Some people were concerned that Walther’s switch to competition pistols would result in a deterioration in the quality of other handgun types, including those used by law enforcement and military personnel. Luckily, this proved not to be the case.

Despite these concerns, the shift towards competition pistols was very successful for Walther. The company kept making high-quality handguns, but they put more emphasis on accuracy and precision for competitive shooting. This made Walther’s guns more popular among competitive shooters, who liked the quality of the guns and the help they got after the sale.

However, the shift in focus also led to a perception among some shooters that Walther had become less innovative and less interested in producing handguns for a wide range of uses. This idea, along with worries about losing independence and the Walther brand’s identity, led Smith & Wesson to separate from them. It would advance both companies’ interests.

Reasons for Smith and Wesson’s Decision to Sell Walther

During this time (in the first two decades of the new millenium), the firearms industry went through a lot of changes, like more competition from foreign manufacturers and changing consumer tastes. Smith & Wesson most likely felt that it was no longer necessary to maintain ownership of Walther in order to remain competitive in the market. Additionally, there were new gun restrictions being implemented in states like New York and Hawaii, and Smith & Wesson began to focus on other areas of their business. 

At first, Smith & Wesson and Walther’s partnership worked well, with sales reaching a very impressive $44 million. However, over time, the partnership began to dwindle. By 2012, revenues had plummeted by $12 million, leaving the companies with only $32 million in sales. This turn of events was disappointing, but the memory of their successful collaboration persists.

After the duo’s peak in 2009, the entire line of Walther guns was generating less revenue than a single product from Smith & Wesson and at a lower profit margin. The PPKs manufactured in Maine only accounted for around 15% of the Walther revenue realized by Smith & Wesson, equating to approximately $4.8 million of the total Walther business.

As a result of the split, Walther began distributing their own German-made guns in the United States in 2013 while continuing to produce the M&P 22 for Smith & Wesson, and Smith & Wesson continued to make PPK pistols for Walther. This was not the end of the story just yet, though.

So They Didn’t Break-Up?

It wasn’t a complete separation, as two-thirds of their current agreements would remain intact. During a 2012 press conference, the former president and CEO of Smith & Wesson, James Debney, said that the two companies had three separate deals: 

• Walther firearms were manufactured in Germany and sold exclusively by S&W 
• Walther PPK pistols were produced in Houlden, Maine, and S&W manufactured and distributed them
• German-made S&W M&P 22 pistols were made by Walther

Which agreement got canned? 

The agreement that was set to end in 2013 was Smith & Wesson’s importation and distribution of German-made Walther guns. This contract had an expiration date of April 30, 2013, while the other two contracts were to remain in place for an additional two years with the option to negotiate terms. Cutting loose from the German company seemed like a smart financial decision for Smith & Wesson, as stated earlier, due to the fact that the entire line of Walther guns generated less revenue and had a lower margin than a single product in the Smith & Wesson line. 

Final Thoughts on Walther and Smith & Wesson

In the end, Walther decided to open its own shop in the US and distribute its own German-made guns in the states, starting in 2013. Despite this change, Smith & Wesson continued to produce the M&P 22 for Walther, while Walther continued to rely on Smith & Wesson for the production of the PPK pistols. Each company has benefitted from their time in collaboration. It is interesting and important to know the history of their partnership as well as their independent development. Both brands offer excellent choices to many types of firearm enthusiasts.

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