Posted on June 11, 2025
Australian shipbuilder Austal Limited (ASX: ASB) has challenged South Korean defense giant Hanwha Group’s announcement regarding U.S. regulatory approval for increased ownership, creating uncertainty around the potential acquisition.
In a statement released Tuesday, Austal revealed that while Hanwha claims to have received approval from the Committee on Foreign Investment in the United States (CFIUS) to increase its shareholding up to 100%, preliminary discussions suggest the actual approval differs from Hanwha’s interpretation. Austal is currently seeking written confirmation from CFIUS to clarify the situation.
Hanwha currently maintains a 9.9% equity stake in Austal, with an additional 9.9% economic interest through a cash settled total return swap. The South Korean company, which acquired its initial stake in March 2025, has submitted an application to Australia’s Foreign Investment Review Board (FIRB) to increase its equity position to 19.9%.
The dispute follows Hanwha’s announcement yesterday claiming CFIUS found “no unresolved national security concerns” with their increased stake. Hanwha Global Defense CEO Michael Coulterd had welcomed the supposed approval, stating it demonstrated “strong support within the U.S. government.”
The development is particularly significant given Austal’s strategic importance in U.S. defense shipbuilder. Through its American subsidiary, Austal USA, the company operates as a major U.S. military shipbuilder and defense contractor, with approximately 80% of its revenue derived from U.S. operations. The company maintains facilities in Mobile, Alabama, San Diego, and Charlottesville, Virginia.
Hanwha’s interest in Austal aligns with broader developments in U.S. manufacturing. The South Korean company has already established a presence in the U.S. shipbuilding sector through its recent acquisition of the Philly Shipyard and also made history earlier this year by becoming the first Korean shipyard to secure a U.S. Navy vessel maintenance contract, servicing the Military Sealift Command’s dry cargo ship USNS Wally Schirra.
This latest development also follows an unsuccessful attempt by Hanwha to acquire Austal entirely last year.
As an ASX-listed defense company, Austal’s ultimate ownership structure will be determined by FIRB’s recommendation and the Australian Treasurer’s decision regarding foreign ownership limits.
Hanwha has positioned itself as a potential strategic partner, offering Austal access to capital, international relationships, and operational expertise. However, the conflicting interpretations of the CFIUS approval underscore the complexities involved in the cross-border defense acquisition.
