Hanwha Group is moving to acquire Austal USA, the U.S. business unit of Australian shipbuilding and defense company Austal. Hanwha has proposed an enterprise value of US$1.05 billion–1.2 billion (approximately KRW 1.5 trillion–1.7 trillion), on a cash-free, debt-free basis, to acquire 100% of Austal USA’s business entity and operating assets.

Following its acquisition of a 19.9% stake in Austal, Hanwha now appears to be seeking to directly acquire the U.S. business unit as well, in a strategy to expand its production foothold and business base in the U.S. shipbuilding and defense market.

According to industry sources on the 11th, Hanwha Group has submitted a non-binding, conditional proposal to acquire Austal USA’s business through its U.S. affiliate, Hanwha Defense USA. Austal USA manufactures vessels for the U.S. Navy and modules for nuclear-powered submarines. Hanwha Defense USA, a subsidiary of Hanwha Aerospace, is responsible for developing Hanwha’s defense business across land, sea and air in the United States.

The current proposal does not involve acquiring all of Austal. Hanwha attempted to acquire the entire Austal group in 2024 but failed. It subsequently secured a 19.9% stake last year to become the largest shareholder, and now appears to have revised its strategy to focus on acquiring only the U.S. operations.

The proposed enterprise value is US$1.05 billion–1.2 billion on a cash-free, debt-free basis. The specific acquisition price and other terms will be finalized following due diligence, a definitive agreement and various regulatory approvals. Due diligence is expected to take about four weeks.

Hanwha’s proposal is subject to conditions including completion of due diligence and signing of a definitive agreement, as well as obtaining necessary regulatory approvals such as reviews by the Committee on Foreign Investment in the United States (CFIUS), the Defense Counterintelligence and Security Agency (DCSA), and a Hart–Scott–Rodino (HSR) review under U.S. antitrust law.

Hanwha plans to submit a more definitive acquisition proposal after consultations with key organizations including the U.S. Department of Defense, the Navy and the Coast Guard.

If Hanwha succeeds in acquiring Austal USA, it will secure multiple shipbuilding production bases linking Philly Shipyard on the U.S. East Coast with Austal USA in Alabama in the South.

Austal USA, whose main production base is in Mobile, Alabama, carries out naval vessel construction projects for the U.S. Department of Defense, the Navy and the Coast Guard.

It has built the U.S. Navy’s Littoral Combat Ships (LCS), Expeditionary Fast Transports (EPF), Coast Guard patrol cutters and auxiliary vessels, and also participates in the production of modules for nuclear submarines.

In particular, Austal USA counts the U.S. government and the Navy as its main customers. For Hanwha, which is seeking to enter the newbuild and MRO (maintenance, repair and overhaul) markets for U.S. Navy vessels, the acquisition is expected to strengthen business linkages with its existing Philly Shipyard operations.

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