South Korean defense firm Hanwha bids up to $1.2b for Austal USA

It does not cover Austal's operations in Australia, the Philippines, and Vietnam.

South Korean defence group Hanwha has offered to acquire the US operations of Australian shipbuilder Austal for an enterprise value of $1.05b to $1.2b.

The indicative, non-binding, and conditional proposal from Hanwha Defence USA covers the business entities and operations of Austal USA.

It does not include Austal's publicly traded shares or its core operations in Australia, the Philippines, and Vietnam.

The proposal is subject to Hanwha completing due diligence on Austal USA, including its US defence contracts, as well as regulatory approvals, definitive transaction agreements, and other customary conditions.

Potential regulatory approvals include those from the Committee on Foreign Investment in the United States, Defense Counterintelligence and Security Agency, and under the Hart-Scott-Rodino Antitrust Improvements Act.

The proposal has no financing condition. Austal's board has given Hanwha four weeks from the date it receives the requested due-diligence information to review the business, engage key counterparties, and progress transaction documentation.

Hanwha may engage the US Department of War, US Navy and US Coast Guard, and, if required, Australia's Department of Defence as part of the process.

The offer comes as Austal expects Austal USA to report an earnings before interest and tax loss of about $175m for financial year 2026 after determining that it would not receive accelerated contractual relief on certain legacy contracts.

Austal said there is no certainty that Hanwha will submit a further proposal or that any subsequent proposal will result in a definitive agreement.