iscover
South Korean defence giant Hanwha Group has reportedly placed a preliminary non-binding offer to buy the US operations of Australian shipbuilder Austal.
Hanwha Defence USA, a subsidiary of Hanwha Aerospace, has reportedly offered $1.05 billion to $1.20 billion for Austal’s US entities and operations.
“Austal has received an indicative, non-binding and conditional offer from Hanwha Defence USA Inc. (“Hanwha”) to acquire the business entities and operations of Austal USA for an indicative enterprise value of US$1.05–1.20 billion on a cash and debt-free basis, subject to a normalised level of working capital and other customary transaction adjustments (“Proposal”),” said a company statement on 11 August.
“The proposal was received prior to this market and trading update and is subject to Hanwha undertaking due diligence on the Austal USA business, including on the terms and economic details of Austal’s US contracts.
“Neither the acquisition of any publicly traded shares in Austal nor Austal’s core Australasia operations are included in the proposal, ensuring that Austal’s sovereign shipbuilding mandate and high-performing Australasian business remain fully intact and continue to generate value for shareholders.
“The Austal Board and its advisers have carefully assessed the proposal and determined that it merits further evaluation, approving Hanwha to undertake due diligence related to Austal USA to improve the certainty of any proposal.
“Austal’s Australasian operations have delivered strong profit growth and cash flow generation with an expected earnings before interest and tax (EBIT) of approximately $62 million (unaudited) for FY2026, demonstrating the resilience and quality of Austal’s sovereign shipbuilding platform.
“Austal is currently building its highly successful Evolved Cape Class vessels for Australian Border Force, before moving to execute the remainder of its large and growing Australian order book under its Strategic Shipbuilding Agreement with the Commonwealth Department of Defence, consisting of 8 x Landing Craft Heavy vessels and 18 x Landing Craft Medium vessels, in addition to potential from the General Purpose Frigate program.
“The Austal Board has determined to provide Hanwha a four-week period, commencing from the date that due diligence information requested by Hanwha is made available, to: Undertake due diligence related to Austal USA (including a review of Austal USA contracts and the announced trading update), engage with key counterparties including the United States Department of War and US Navy/US Coast Guard, and if required, the Australian Department of Defence, and progress transaction documentation to enable Hanwha to present a more certain proposal.”
“Hanwha Defense USA has made a preliminary, non-binding offer to acquire Austal’s US business. Any deal will be contingent on due diligence that permits a thorough evaluation of Austal USA’s operations and financials, including newly disclosed information,” said Hanwha Defense USA Spokesman James Hewitt.
“Hanwha has made it a priority to significantly contribute to revitalising American shipbuilding and is exploring a range of options to expand our footprint in the United States.”
Want to see more stories from trusted news sources?
Make Defence Connect a preferred news source on Google.
Click here to add Defence Connect as a preferred news source.