The Australian government’s approval on the 12th of Hanwha Group’s acquisition of a 19.9% stake in Austal has made Hanwha the largest shareholder of the global defense and shipbuilding company Austal. Jim Chalmers, Australia’s Treasurer, stated on the same day, “We have approved Hanwha’s stake expansion following the recommendation of the Foreign Investment Review Board.”
Austal is the market leader in directly constructing small surface vessels and military support ships at its shipyards in the United States. Following the acquisition of a 9.9% stake in Austal through an over-the-counter transaction last March, Hanwha Group requested approval from the Australian and U.S. governments to expand its stake to 19.9%. After the U.S. government’s approval in June, this approval from the Australian government has made Hanwha the largest shareholder of Austal, surpassing Tata Rang Ventures, 19.28% as of the end of the first half.
Son Jae-il, representative of Hanwha Aerospace, stated, “We are satisfied with this decision following a rigorous review and will thoroughly comply with the approval conditions,” adding, “We will strengthen strategic cooperation with Austal by leveraging Hanwha’s capabilities and insights.”
Industry experts believe this approval will add momentum to the South Korea-U.S. shipbuilding cooperation project ‘MASGA.’ The analysis suggests that combining Hanwha’s global shipbuilding capabilities with Austal’s network within the U.S. Department of Defense and Navy will generate significant synergy.
Meanwhile, Japan, a partner in Australia’s next-generation frigate project, has been strongly opposing Hanwha’s acquisition of Austal due to concerns over the leakage of core technologies. Hanwha attempted to acquire and merge with the company through M&A for over a year last year but eventually halted the process due to opposition from Japan. However, this time, Hanwha changed its approach to ‘management participation’ and made a second attempt, leading to the Australian government’s approval decision on the same day.