Hanwha plans to invest up to $1.2 billion in acquiring Austal USA, the U.S. business of Australian shipbuilder and defense contractor Austal. Following its acquisition of Philly Shipyard, the deal could give Hanwha additional production facilities in the United States, accelerating its push into the specialized shipbuilding market.
Hanwha Aerospace’s U.S. Subsidiary Offers Up to $1.2B for Austal USA
Hanwha Defense USA, the U.S. subsidiary of Hanwha Aerospace, recently submitted a preliminary proposal to acquire Austal’s U.S. business, industry sources said Aug. 11. The offer is valued at $1.05 billion to $1.2 billion, based on a cash-free, debt-free basis.
Hanwha made the proposal conditional on due diligence, which Austal’s board has approved. The due diligence process will run for four weeks from the date Austal provides the information requested by Hanwha.
The proposed acquisition is limited to Austal’s U.S. business. It does not include Austal’s headquarters or its Australia-Asia operations.
The acquisition would require regulatory approvals, including from the Committee on Foreign Investment in the United States (CFIUS) and the Defense Counterintelligence and Security Agency (DCSA). Consultations with the U.S. Department of War, the U.S. Navy and Coast Guard, and the Australian Department of Defence would also be required.
Hanwha Defense USA said, “All transactions will be determined based on a thorough evaluation and due diligence of Austal’s U.S. operations and financial condition,” adding that its top priority would be contributing to the revival of the U.S. shipbuilding industry.
Austal said it approved the due diligence after determining that Hanwha’s proposal warranted further evaluation, adding that if a more definitive offer is received, it will evaluate the proposal with priority given to the intrinsic value of the U.S. business and shareholder value.
Hanwha Revives Acquisition Effort After Abandoning Bid in 2024
Hanwha has been pursuing Austal since 2024 but previously abandoned its acquisition attempt. Hanwha Ocean had offered A$1.02 billion, or about $700 million, but withdrew the proposal, citing a lack of cooperation from Austal management.
Hanwha resumed its efforts to acquire Austal last year by purchasing shares through over-the-counter transactions. It secured a 19.9% stake, becoming the company’s largest shareholder, and obtained approval from the Australian government and CFIUS for its ownership.
Hanwha’s interest in Austal stems from its strategy to strengthen its position in the U.S. defense market. The launch of the MASGA project for U.S.-South Korea shipbuilding cooperation following the start of the second Trump administration has also contributed to its push to expand production capacity in the United States.
Austal is one of four key suppliers to the U.S. Navy. It holds roughly 50% of the U.S. market for small surface vessels and military support ships and operates shipbuilding facilities in Mobile, Alabama, and San Diego, California.
Hanwha Group previously acquired Philly Shipyard in June 2024 for $100 million. The shipyard had primarily focused on commercial vessels, but following the acquisition, Hanwha has been expanding its operations into specialized shipbuilding and maintenance.
If Hanwha also acquires Austal’s U.S. business, its position in the U.S. maritime defense market is expected to strengthen further.
Although the U.S. government is pursuing measures to allow warships to be built overseas, domestic construction remains the principle, which is expected to give Hanwha a more favorable position as it expands its specialized shipbuilding business.