Defence prime Austal has confirmed that Hanwha Defence USA (Hanwha) has made a conditional, indicative, and non-binding offer to acquire 100% of the shares in Austal USA’s holding entities.
The offer, valued between $1.05bn and $1.2bn, does not cover Austal’s publicly listed Australian shares or its shipbuilding operations in Australia, the Philippines, and Vietnam.
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The approach from Hanwha comes as the South Korean group seeks to extend its footprint in the US defence sector.
Last month, Hanwha Ocean signed an agreement and two memoranda of understanding with partners in the US shipbuilding industry, signalling increased cooperation between South Korea and the US in this field.
Austal stated that Hanwha’s proposal is subject to a series of conditions, including regulatory clearance from US authorities such as the Committee on Foreign Investment in the US (CFIUS), the Defence Counterintelligence and Security Agency (DCSA), and approval under the Hart-Scott-Rodino Antitrust Improvements Act.
Satisfactory completion of due diligence and negotiation of final transaction agreements are also required.
As of now, Hanwha is granted a four-week window, starting from the point when requested due diligence information is made available, to review Austal USA’s financials and contracts, consult with key US stakeholders such as the Department of War and the Navy, and work towards a more definitive offer.
Austal said it will evaluate any improved proposal in the best interests of all shareholders, but added there is currently no assurance an agreement will be reached.
“There is no certainty that a further proposal will be received, or that if a further proposal is received, it will result in a definitive agreement. Austal will continue to update the market in accordance with its continuous disclosure obligations,” the company said.
The announcement coincided with Austal’s latest market update. The shipbuilder said it expects a group earnings before interest and taxes (EBIT) loss of approximately A$113m for fiscal 2026, driven by an anticipated loss of around A$175m from its US operations following revised assessments of contract recoverability.
By contrast, its Australasia operations are forecast to deliver an EBIT profit of roughly A$62m.
Austal highlighted that any potential sale of Austal USA would not affect its Strategic Shipbuilding Agreement with the Australian government.
The 15-year contract, established in 2023, designates Austal as the Commonwealth’s strategic sovereign shipbuilder at its Henderson, Western Australia site.
The company, which entered a trading halt before the announcement, said the halt would now be lifted.
Austal is being advised by Jefferies Australia and Herbert Smith Freehills Kramer as it considers the Hanwha proposal.
