Hanwha Group has made a strategic investment by acquiring a stake in Austal, an Australia-based global shipbuilding and defense company. Austal is one of the four primary contractors responsible for building vessels directly for the U.S. Navy, offering Hanwha a significant opportunity to strengthen its position in both the global shipbuilding and defense sectors.
On Tuesday, Hanwha announced it had acquired a 9.9% stake in Austal through over-the-counter trading on the Australian Securities Exchange. Additionally, the company has entered into a Total Return Swap (TRS) agreement for another 9.9% stake via an Australian securities firm. Hanwha has applied to the Australian Foreign Investment Review Board to approve its 19.9% investment, including the shares it purchased directly and the TRS agreement. If authorization is granted, Hanwha will become Austal’s largest shareholder. This investment is being executed through an Australian subsidiary jointly owned by Hanwha Systems (60%) and Hanwha Aerospace (40%).
Austal is a prominent supplier to the U.S. Navy, with a robust order backlog of AUD 14.2 billion (around USD 9 billion). The company is a dominant player in the U.S. market for small surface combatants and logistics support vessels, holding a 40-60% market share. A Hanwha spokesperson commented, “Our partnership with Austal is aimed at strengthening strategic relationships not just with South Korea and Australia but also with the United States.”
This acquisition follows Hanwha’s historic purchase of a U.S. shipyard in December, marking the first time a South Korean company has made such a purchase. This move signals Hanwha’s ambition to expand its global presence. With its proven track record in commercial and naval shipbuilding and strong ties to the U.S. Department of Defense and Navy, Hanwha expects powerful synergies with Austal, which could significantly boost future orders.