A U.S. Navy Littoral Combat Ship (LCS) manufactured by Austal
(Image source: Austal website)
SEJONG, South Korea, March 17 (Korea Bizwire) — Hanwha Group is making a renewed attempt to acquire Austal, an Australian shipbuilding company that supplies vessels to the U.S. and Australian navies, through its defense affiliates Hanwha Systems and Hanwha Aerospace.
The move follows Hanwha’s previous failed bid in April 2024, when its subsidiary Hanwha Ocean offered A$1.02 billion to acquire Austal, but the proposal was rejected by the company’s management. This time, Hanwha is reportedly pursuing an open market stake purchase instead.
Strategic Investment for Global Expansion
According to regulatory filings on Monday, Hanwha Systems and Hanwha Aerospace injected ₩202.7 billion and ₩64.2 billion, respectively, into their Australian subsidiary, HAA No.1 PTY LTD, through a rights offering.
While the companies did not explicitly disclose the purpose of the investment, industry insiders suggest that the funds will be used to acquire a significant stake in Austal, whose current market capitalization stands at A$1.39 billion.
With these funds, Hanwha’s Australian subsidiary could potentially secure a 25% stake in Austal, exceeding the 19.61% held by its largest shareholder, Tattarang Ventures.
This graphic, provided by Hanwha Ocean Co. on Dec. 19, 2024, shows a representation of a frigate under the country’s planned FFX-Batch IV program. (Image courtesy of Yonhap)
Why Austal Matters
Austal specializes in building naval ships, high-speed ferries, offshore wind farm vessels, and oil and gas platform ships. It plays a critical defense role by supplying ships to the Australian Navy and designing and constructing vessels for the U.S. Navy at its Alabama-based shipyard.
Given Austal’s strategic importance, any foreign acquisition would require regulatory approvals from:
- Australia’s Foreign Investment Review Board (FIRB)
- The U.S. Committee on Foreign Investment (CFIUS)
- The U.S. Defense Counterintelligence and Security Agency (DCSA)
Hanwha’s Growing U.S. Shipbuilding Ambitions
Hanwha’s renewed push to acquire Austal aligns with its broader ambition to expand into the U.S. shipbuilding market. The company sees potential synergies between Austal and Hanwha Ocean, which has been expanding its presence in global naval defense markets.
Previously, Hanwha secured a foothold in North American shipbuilding and defense by acquiring Philippine-based shipbuilder HHIC-Phil, bolstering its capacity to manufacture military vessels.
With Donald Trump’s administration prioritizing a naval buildup amid escalating competition with China, analysts expect a surge in U.S. military and commercial shipbuilding, making Hanwha’s strategic move particularly timely.
As Hanwha moves forward with its acquisition attempt, its ability to navigate regulatory approvals in both Australia and the U.S. will be key to securing a stake in Austal and expanding its influence in the global naval defense industry.
M. H. Lee (mhlee@koreabizwire.com)
