South Korean conglomerate Hanwha Group has acquired a 9.9% stake in Australian shipbuilder Austal Ltd. for A183.3 million (183.3 million (117 million).
The purchase, made through Hanwha Systems and Hanwha Aerospace, involved 41.2 million shares at A$4.45 per share, a 16% premium to Austal’s closing price on Monday.
Hanwha also secured a cash-settled Total Return Swap (TRS) deal for an additional 9.9% stake, potentially increasing its total holding to 19.9% pending approval from the Australian Foreign Investment Review Board (FIRB).
The acquisition follows Hanwha’s unsuccessful A1.02 billion (1.02 billion (650.96 million) takeover bid for Austal in 2024.
The move aims to strengthen Hanwha’s strategic partnerships in the global defense and shipbuilding sectors, particularly in the US, where Austal generates nearly 80% of its revenue.
Austal’s stock rose 7.6% in Sydney following the announcement.
Michael Coulter, Hanwha Aerospace's Defense Business Global CEO, stated: “Hanwha’s position as a global leader in smart shipbuilding will provide Austal access to capital, international relationships, and operational expertise, enhancing Australia’s sovereign defense capability.”
Austal, a major supplier to the US Navy, specializes in building commercial and defense vessels, including the Independence-class Littoral Combat Ship (LCS). The company operates shipyards in Alabama, USA, and Henderson, Western Australia, with an order backlog of A$14.2 billion.
Hanwha Group is a South Korean conglomerate with interests in chemicals, defense, and shipbuilding, operating globally through subsidiaries like Hanwha Aerospace and Hanwha Ocean.
Hanwha Ocean is a South Korean shipbuilder, formerly Daewoo Shipbuilding & Marine Engineering, specializing in commercial and defense ships, including submarines.