A major South Korean conglomerate this week purchased a significant stake in Australian shipbuilder Austal, with hopes of expansion.
On March 18
Hanwha Group said it acquired a 9.9 percent stake in Austal as a “strategic investment” to become a long-term strategic partner in developing Australian defense capabilities.
The company on Tuesday also said it officially applied for approval by the Australian Foreign Investment Review Board (FIRB) to add another 9.9 percent stake via a total return swap, which if approved would increase its total shareholding value to 19.9 percent. Australian regulators must approve purchases of 10 percent or more of a company.
Hanwha in a press release argued it wants to make a “meaningful contribution” to Austal and the Australian defense industry by providing its manufacturing and operational experience to maximize company opportunities.
“As a strategic shareholder there will be a great opportunity for us to add significant value to Austal’s business, including in global defence and shipbuilding, supporting investment in Australia’s local manufacturing industry and capacity,” Michael Coulter, Global Chief Executive Officer and President at Hanwha Defence, said in a statement.
This move comes as Hanwha continued to make moves to expand its defense sector and shipbuilding portfolio into Australia and the U.S.
Last year, Hanwha also made an unsolicited acquisition offer for Austal, which it ultimately declined (Defense Daily, April 2, 2024).
In 2024 Hanwha also bought Philly Shipyard for $100 million with plans to expand work beyond the current portfolio of Jones Act commercial vessels, maintenance, repair, overhaul and conversion work for Military Sealift Command shops and building National Security Multi-Mission Vessels (NSMV) for the Maritime Administration (Defense Daily, June 20, 2024).
Last year, former Secretary of the Navy Carlos Del Toro visited Hanwha Ocean’s shipyard, expressing interest in investment in the U.S. and expanding cooperation (Defense Daily, April 10, 2024).
“Hanwha’s position as a global leader in smart shipbuilding will provide Austal access to capital, international relationships and operational and technical expertise which can accelerate the development of Austal’s business and in turn, enhance Australia’s sovereign defense capability, at a time when this capability is more important than ever,” Coulter added.
He emphasized the South Korea company is looking to replicate its investment in land capability in Geelong, Australia to improve growing local presence through investment and partnerships.
Last August, Hanwha Aerospace completed construction on the Hanwha Armoured Vehicle Centre of Excellence (H-ACE) in Geelong, Australia, the first overseas production base for Hanwha.
Coulter added Hanwha will seek to gain board representation as a result of this purchase.
Hanwha owns subsidiary Hanwha Ocean, the former Daewoo Shipbuilding and Marine Engineering company in South Korea that builds various South Korean naval vessels, LNG and very large crude oil carriers.
Austal’s Austal USA shipyard in Mobile, Ala., builds one variant of the U.S. Navy’s Littoral Combat Ships, Spearhead-class Expeditionary Fast Transport ships, new T-AGOS(X) ocean surveillance ships and an increasing amount of modular components for American submarines.