Cerberus to sell maker of school massacre weapon

The US company that manufactured the lethal assault rifle used in last week's grade school massacre was put up for sale Tuesday as its main shareholder sought to distance itself from the killings.

Private capital group Cerberus Capital Management announced it would sell its shareholding in Freedom Group, which makes the Bushmaster AR-15 semi-automatic rifle used to murder 20 children and six adults at the Sandy Hook elementary school in Newtown, Connecticut.

Amid a surge in calls for tougher gun controls, Cerberus said it was "immediately" starting the formal process to sell its shares in Freedom Group, which it purchased in 2006 as a financial investment.

The company tied its decision to Friday's school attack in Newtown by a heavily armed 20-year-old man whose motives are still not publicly known.

The man also murdered his mother, a firearms enthusiast.

"It is apparent that the Sandy Hook tragedy was a watershed event that has raised the national debate on gun control to an unprecedented level... As a firm, we are investors, not statesmen or policy makers. Our role is to make investments on behalf of our clients," the company said in a statement.

"There are, however, actions that we as a firm can take. Accordingly, we have determined to immediately engage in a formal process to sell our investment in Freedom Group."

Cerberus said the decision would allow it to meet its obligations to its investors "without being drawn into the national debate" on gun control.

Cerberus sought to distance itself and Freedom Group from both the tragedy and the firearms debate.

"Freedom Group does not sell weapons or ammunition directly to consumers, through gun shows or otherwise. Sales are made only to federally licensed firearms dealers and distributors in accordance with applicable laws and regulations," it said.

"We do not believe that Freedom Group or any single company or individual can prevent senseless violence or the illegal use or procurement of firearms and ammunition."

Cerberus was not the only investor group seeking to reexamine its support for US gun manufacturers, most of which are privately owned.

The huge pension fund manager, the California State Teachers' Retirement System, a major client of Cerberus, said it was reviewing its exposure to the industry and its 2.4 percent shareholding in Freedom Group.

North Carolina-based Freedom Group manufactures a number of brands popular with the military, police, hunters and the public, including Bushmaster, Remington, Marlin, Dakota Arms, Para pistols, and DPMS Panther.

The various makers were assembled under one roof by Cerberus, which first bought Bushmaster in 2006 and then other various gun and ammunition makers.

Freedom Group has not commented on the Sandy Hook shootings or the rising gun control debate, and has not been accused of any wrongdoing.

But in 2004, Bushmaster paid $568,000 to families of victims of the "DC Sniper," who killed 10 people indiscriminately in the Washington area in October 2002.

Bushmaster was accused of negligence in distributing its firearms to a dealer which handled and sold them on in an irresponsible manner, including to the sniper. The dealer paid the families $2 million.

Meanwhile, shares of the only publicly traded gun maker, Smith and Wesson, plunged 10 percent Tuesday amid worries its business could be hit by tougher gun control laws.