- Hanwha Group becomes a major shareholder in Austal after acquiring 9.9% equity and securing an additional 9.9% via a Total Return Swap (TRS).
- Australian Foreign Investment Review Board (FIRB) approval sought for a 19.9% stake.
- The investment was made through a local subsidiary owned by Hanwha Systems (60%) and Hanwha Aerospace (40%).
- The move aligns with Hanwha’s growing presence in U.S. and allied shipbuilding markets, following its 2024 acquisition of a U.S. shipyard.
Hanwha Group has taken a significant step in expanding its global shipbuilding and defense footprint by acquiring a major stake in Australian shipbuilder Austal. The investment, announced on 18 March, reinforces Hanwha’s ambitions in the defense and naval sectors across Korea, Australia, and the U.S.
Strategic Stake Acquisition
Hanwha directly purchased 9.9% of Austal’s equity through over-the-counter trading on the Australian Securities Exchange (ASX). Additionally, Hanwha secured another 9.9% via a Total Return Swap (TRS), a financial mechanism that allows profit and loss exposure without direct ownership.
To increase its stake to 19.9%, Hanwha has applied for approval from the Australian Foreign Investment Review Board (FIRB).
This investment was executed through a local Australian subsidiary:
- 60% owned by Hanwha Systems
- 40% owned by Hanwha Aerospace
Austal: A Key Player in U.S. Naval Shipbuilding
Austal is a major U.S. Navy supplier, ranking first in the small surface combatant and logistics vessel segment with a 40% to 60% market share. The company operates shipbuilding facilities in:
- Henderson, Western Australia
- Mobile, Alabama
- San Diego, California
- The Philippines and Vietnam
Austal’s order backlog stands at 14.2 billion AUD (approximately 13 trillion KRW), positioning it as a critical player in global naval defense production.
Synergies and Growth Potential
Hanwha sees significant synergies between Austal’s shipbuilding capabilities and its own expertise in commercial and naval vessel construction. The company expects increased defense orders, leveraging:
- Hanwha’s relationships with Korea’s Ministry of National Defense and the Navy.
- Austal’s U.S. defense contracts and shipbuilding experience.
Expanding Hanwha’s Global Shipbuilding Influence
This move is part of Hanwha’s broader expansion strategy in shipbuilding and defense, including its December 2024 acquisition of a U.S. shipyard.
Recent U.S. legislative efforts, such as the Shipbuilding Law for America and the Naval Readiness Assurance Act, could further boost opportunities for allied shipbuilding partnerships. With increasing collaboration between Korea, Australia, and the U.S., Hanwha is well-positioned to strengthen its global market presence.
Michael Cooler, head of overseas operations at Hanwha Aerospace, said, ‘Hanwha’s smart shipbuilding and defense industry capabilities can provide Austal with capital, networks, operational, and technical expertise. We particularly anticipate successful cooperation with Austal based on our experience in establishing strong partnerships in the global defense and shipbuilding industry.’
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Source: Chosunbiz
