Hanwha Group is investing approximately 300 billion won ($206.4 million) to acquire about 20% stake in Austal, an Australian shipbuilding and defense company, as part of its second attempt to participate in the company’s management.
Hanwha spent more than a year trying to persuade Austal’s management to agree to a full acquisition but halted the effort in September last year. Now, the company is making a second attempt with a different approach, securing a significant minority stake to participate in management.
Hanwha’s persistent interest in Austal stems from its strategic goal of expanding beyond Australia into the world’s largest defense market, the United States. Austal operates shipyards in the U.S., where it specializes in building small surface vessels and auxiliary ships, holding the top market share in these categories. As the U.S. intensifies its maritime competition with China, Austal’s position in the defense industry is expected to strengthen.
On Mar. 18, Hanwha announced that its Australian subsidiary—jointly established by Hanwha Systems and Hanwha Aerospace—had acquired a 9.9% stake in Austal through a public tender offer on the Australian Securities Exchange on Mar. 17.
Separately, Hanwha also secured an additional 9.9% stake through a Total Return Swap (TRS) agreement with a local securities firm.
Under the TRS agreement, the shares remain legally owned by the securities firm, but Hanwha retains voting rights and other shareholder privileges. With these transactions, Hanwha now holds a total 19.8% stake in Austal, making it the largest shareholder and positioning itself for active participation in the company’s management.
Still, challenges remain. The investment must receive approval from Australia’s Foreign Investment Review Board (FIRB) before it can be finalized. Under Australian regulations, any foreign entity acquiring more than a 10% stake in a government-designated strategic shipbuilder must go through this review process.
Furthermore, with only about 20% ownership, Hanwha does not have full managerial control. To strengthen its influence, it will need to work with other major shareholders, including Tattarang Ventures (19.56%) and Austal’s founder, John Rothwell (8.74%), along with the company’s current leadership.
If Hanwha successfully secures its role in Austal’s management, it expects to accelerate its expansion into not only the Australian but also the U.S. defense market.
Hanwha already operates manufacturing facilities in Australia for K9 self-propelled howitzers and Redback armored vehicles, and in June last year, it acquired a shipyard in Philadelphia, United States.
With Austal’s shipyards in Western Australia, Mobile, Alabama, and San Diego, California, Hanwha expects to create significant synergies with its existing operations, further strengthening its foothold in the global defense industry.
