Hanwha Approved to Acquire 19.9% Stake in Austal... Synergy in Australia-U.S. Defense Cooperation Rises (Comprehensive)

With the Australian government granting final approval for Hanwha Group's acquisition of a stake in Austal, Hanwha is accelerating its global expansion strategy in the maritime defense sector. The synergy between Hanwha's proven shipbuilding capabilities in the global commercial vessel and warship sectors and its strong network with the U.S. Department of Defense and Navy, combined with Austal's strengths, is expected to drive an increase in future orders.

Exterior view of Hanwha Building located in Jung-gu, Seoul. Hanwha

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On December 12, the Australian government approved Hanwha Group to acquire up to a 19.9% stake in Austal, the Australian shipbuilding and defense company. In a statement released that day, Australian Treasurer Jim Chalmers said, "I have agreed with the Foreign Investment Review Board's clear recommendation not to oppose Hanwha's proposal to increase its stake in Austal from 9.9% to 19.9%, under strict conditions."

Hanwha Group had acquired a 9.9% stake in Austal through an over-the-counter transaction in March and subsequently applied for approval from both the Australian and U.S. governments to increase its stake to 19.9%.

This acquisition is aimed at strengthening the strategic partnership among South Korea, Australia, and the United States through cooperation with Austal, amid the favorable conditions in the global defense and shipbuilding industries. Previously, in December of last year, Hanwha became the first Korean company to acquire the Philadelphia Shipyard in the United States, marking a significant step in its global market expansion.

Headquartered in Australia, Austal operates shipbuilding businesses in Mobile, Alabama, San Diego, and other locations, constructing and delivering naval vessels to the United States. As one of the four core suppliers to the U.S. Navy, Austal holds an order backlog worth 1.42 billion Australian dollars (approximately 1.3942 trillion won) and leads the U.S. market for small surface vessels and auxiliary support ships with a market share of 40-60%. The company, which previously focused on aluminum vessels, has recently stabilized its transition to steel ship construction.

Hanwha Group has been pursuing the acquisition of Austal shares to strengthen its defense business in the United States and Australia.

Previously, in June, the U.S. government approved Hanwha to own up to 100% of Austal shares.

Michael Coulter, Head of Overseas Business at Hanwha Aerospace, stated, "As a strategic investor, Hanwha will support Austal's growth and innovation and will spare no effort in investing to strengthen the local defense and naval shipbuilding capabilities in Australia. Hanwha's smart shipbuilding and defense industry expertise can provide Austal with capital, networks, operational, and technological know-how. In particular, based on our experience in building strong partnerships in the global defense and shipbuilding industries, we look forward to a successful collaboration with Austal."

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