Hanwha increases Austal stake to deepen U.S. footprint

Australian Treasurer Jim Chalmers said in a statement on Dec. 12 local time that he accepted a recommendation from the Foreign Investment Review Board not to oppose Hanwha’s plan to raise its stake in Austal from 9.9 percent to 19.9 percent. Austal operates shipyards in Mobile, Alabama, and San Diego, where it builds and supplies naval vessels for the U.S. Navy. Because the company is designated as a strategic enterprise by the Australian government, any foreign sale of shares requires approval from both the United States and Australia.

Hanwha has pursued the acquisition since last year as part of its broader effort to expand its U.S. defense shipbuilding business. The company bought a 9.9 percent stake in Austal through an over-the-counter transaction in March and later sought approval from both governments to increase its holdings to 19.9 percent. The U.S. government granted its approval in June. Once the deal is finalized, Hanwha will overtake the current top shareholder, Tattarang Ventures, which holds 19.28 percent.

Hanwha has pursued the acquisition since last year as part of its effort to expand its U.S. defense shipbuilding business. The company acquired a 9.9 percent stake in Austal through an over-the-counter transaction in March and later sought approval from the U.S. and Australian governments to increase its stake to 19.9 percent. The U.S. government granted approval in June. Once the deal is completed, Hanwha will surpass the current top shareholder, Tattarang Ventures, which holds 19.28 percent.

However, the stake purchase is not intended to secure management control. Chalmers also said Hanwha will not be allowed to raise its stake above 19.9 percent. In a statement released on Dec. 12, Hanwha said it would fully comply with all approval conditions.

With Hanwha gaining another foothold in the U.S. shipbuilding sector after its investment in the Philly Shipyard, momentum is expected to build for the MASGA initiative. Hanwha’s shipbuilding capabilities are likely to create synergy with Austal’s U.S. naval shipbuilding technology and its established networks within the Department of Defense and the U.S. Navy.


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