South Korean defense giant Hanwha Group is considering acquiring Austal USA. If the deal goes through, Hanwha Group will take control of one of the largest naval shipyards in the United States.
On August 10, a spokesperson for Hanwha Defense USA confirmed that the company had submitted a non-binding preliminary offer to acquire Austal USA, with the transaction’s completion contingent upon due diligence.
Austal USA’s parent company, the Australian defense shipbuilder Austal, disclosed that Hanwha’s valuation of Austal USA—calculated on a cash-free, debt-free basis—ranges from $1.05 billion to $1.2 billion. The offer covers only Austal USA’s business entities and operating assets; it excludes the parent company’s equity and Austal’s shipbuilding operations in Australia, the Philippines, and Vietnam.
Austal’s board of directors considers the proposal worthy of further evaluation and plans to conduct a four-week due diligence process once the necessary information is obtained.
Given Austal USA’s deep involvement in sensitive U.S. defense projects, the transaction will face rigorous regulatory scrutiny. Austal stated that required approvals could involve reviews by the Committee on Foreign Investment in the United States (CFIUS), the Defense Counterintelligence and Security Agency, and U.S. antitrust authorities.
The announcement of this proposed acquisition comes as Austal USA faces significant financial setbacks across several U.S. defense shipbuilding programs.
Austal projects that its U.S. operations (Austal USA) will record an EBIT loss of approximately US$175 million in the 2026 fiscal year, driven by losses on the Towing, Salvage, and Rescue Ship (T-ATS) program, the Auxiliary Floating Dock Medium (AFDM) program, and the Landing Craft Utility (LCU) program. Consequently, the group has sharply downgraded its earnings outlook, now anticipating an EBIT loss of approximately US$113 million for the 2026 fiscal year, a stark reversal from its previous forecast of a US$110 million profit.
Beyond the loss-making projects mentioned above, Austal USA is also undertaking the U.S. Coast Guard’s Offshore Patrol Cutter (OPC) program; the company is set to build up to 11 OPCs under a contract with a potential value of US$3.3 billion, with deliveries expected to commence in 2027.
Established in 1999 and based in Mobile, Alabama, Austal USA completed its first major expansion in November 2005 and specializes in the construction of steel and aluminum vessels. The company currently employs approximately 3,500 people, holds an order book exceeding US$10 billion, and has delivered more than 30 vessels to the U.S. to date.
Austal USA’s ship repair facilities cover 60,000 square meters and feature a 20,000-ton floating dry dock, nearly 10,000 square meters of indoor workshop space, and 28,000 square meters of outdoor yard space. Its shipbuilding facilities include an indoor module manufacturing area (70,000 square meters), a final assembly hall (with four assembly bays), and a 146,000-square-meter outfitting and completion area (featuring a 305-meter by 91-meter dry dock and four berths).
For Hanwha Group, the decision to acquire Austal USA marks another major expansion into the U.S. shipbuilding market.
In late 2024, Hanwha Group invested approximately US$100 million to acquire the Philly Shipyard in the United States, renaming it Hanwha Philly Shipyard. The group plans to develop it into an iconic hub for the U.S. shipbuilding industry. Its subsidiaries, Hanwha Ocean and Hanwha Systems, hold 40% and 60% stakes in the shipyard, respectively.
In August 2025, Hanwha Group announced an additional US$5 billion investment in the U.S. shipyard to construct two new dry docks, three piers, and a hull production facility. By introducing automation equipment and smart shipyard systems, the group aims to significantly boost annual production capacity from the current 1–1.5 vessels to 20—effectively multiplying capacity—to play a more substantial role in the U.S. shipbuilding market.
Subsequently, Hanwha Group subsidiary Hanwha Shipping placed orders with Hanwha Philly Shipyard for over ten commercial vessels, including the first LNG carrier order in the U.S. shipbuilding industry in nearly 50 years and ten Jones Act-compliant product tankers.
If the acquisition of Austal USA proceeds successfully, it would mark Hanwha Group’s ownership of a second major shipyard in the United States.
However, significant uncertainty remains regarding the acquisition. Austal emphasized that Hanwha’s proposal is merely a non-binding preliminary offer, with no guarantee that the due diligence process will result in a revised bid or a final transaction. The company’s board of directors will evaluate any future acquisition proposals based on Austal USA’s “intrinsic value” and the interests of its shareholders.
It is worth noting that Hanwha Group had previously received approval to increase its stake in Austal from 9.9% to 19.9%. That acquisition effort had faced strong opposition from Austal and took two years to achieve substantive progress.
Hanwha emphasized that the proposed acquisition of Austal USA by its subsidiary would be pursued separately from its move to increase its equity stake in Austal to 19.9%.
In April 2024, Hanwha Ocean submitted a US$662 million acquisition offer for Austal, but the latter rejected it, citing the difficulty of obtaining approval from Australia’s Foreign Investment Review Board (FIRB) and the sensitivity of its core business operations. A breakthrough occurred in June when Austal permitted Hanwha Ocean to conduct site visits, though it demanded a “standstill fee”—a request Hanwha Ocean refused. Negotiations subsequently collapsed in October, and the acquisition process was terminated.
Six months later, Hanwha Group made another attempt to acquire Austal. In March 2025, Hanwha Group subsidiaries Hanwha Systems and Hanwha Aerospace acquired a 9.9% stake in Austal through open-market transactions.
As Austal is a strategic shipbuilder designated by the Australian government and a direct builder of naval vessels for the U.S., any sale of equity to an overseas entity requires dual approval from both the Australian and U.S. governments. Hanwha Group secured the necessary regulatory approvals from CFIUS and FIRB—scheduled for June and December 2025, respectively—to increase its stake in Austal from 9.9% to 19.9%.
Industry analysts in South Korea attribute Hanwha Group’s relentless determination to acquire the company to a strategic focus on the U.S. defense shipbuilding market and the MASGA (Maritime Alliance for Shipyard Growth and Affordability) partnership between South Korea and the U.S., rather than on Austal’s local Australian operations. The recent announcement of its intent to acquire Austal USA further confirms this strategic market positioning.