Hanwha Offers Up to $1.2 Billion for Austal US Business

Australian shipbuilder Austal said Tuesday that South Korea’s Hanwha Group has offered up to $1.20 billion to acquire its U.S. operations, potentially strengthening Hanwha’s position in the American defence and shipbuilding market.

Austal shares jumped nearly 13% in early trading, marking their strongest intraday gain since mid-February. The company was the top performer on Australia’s benchmark ASX 200 index, which was up around 0.2% at 0035 GMT.

Hanwha Defence USA submitted an offer valuing Austal’s U.S. entities and operations at between $1.05 billion and $1.20 billion. The proposed acquisition would expand Hanwha’s U.S. shipbuilding footprint following its purchase of Philly Shipyard in Philadelphia in 2024.

Hanwha has identified the revitalisation of American shipbuilding as a strategic priority and is considering opportunities to increase its presence in the United States, according to company spokesperson James Hewitt.

Austal, Australia’s largest shipbuilder, produces vessels for major customers including the U.S. Navy and U.S. Coast Guard. Its American operations accounted for about 90% of the group’s A$108.5 million pre-tax profit in fiscal 2025, highlighting the importance of the business to Austal’s financial performance.

The Hanwha offer excludes Austal’s operations in Australia, the Philippines and Vietnam, as well as its ASX-listed shares. Austal also said the proposed transaction would not affect its Strategic Shipbuilding Agreement with the Australian government.

Hanwha has been granted four weeks to conduct due diligence on the U.S. business. The South Korean conglomerate has also been increasing its investment in Austal. Australia approved Hanwha’s proposal in December to lift its Austal stake from 9.9% to 19.9%, subject to security and data-access conditions.

The potential deal comes as Austal faces near-term financial pressure. Its U.S. division is forecast to record an A$175 million operating loss in fiscal 2026 due to higher losses on shipbuilding programmes. Austal expects a group operating loss of A$113 million for 2026, reversing operating earnings of A$113.4 million a year earlier.