Posted on August 12, 2026
By Sam LaGrone
South Korean Shipbuilder Hanwha has made a $1 billion bid for the U.S. subsidiary of Australian shipbuilder Austal, Austal disclosed in a regulatory filing on Tuesday morning Australian time.
Austal also revised its previous guidance from an estimated $77.6 million (AUD 110 million) in profits to a loss of $79.73 million (AUD 113 million) based on an accounting event around the Mobile, Ala., yard’s contract setbacks with the Navy’s Navajo-class tow, salvage and rescue ships (T-ATS), the Auxiliary Floating Dry Dock Medium (AFDM) and the Landing Craft Utility 1700 program, according to a statement the company posted to the Australian Stock Exchange.
Austal reported in February it was negotiating for contractual relief from the U.S. Navy for legacy programs the yard had inherited. The negotiations continued into the second half of the year and expanded beyond the Navy to include the larger Department of Defense. Austal argued to the Navy and the Pentagon that assuming the lead yard responsibilities for T-ATS and LCU, “together with changes in customer requirements and deficiencies in design specifications provided to Austal USA,” required contract relief, according to the statement.
“Those discussions continued throughout the second half of FY2026, and based on their progress and Austal’s experience in resolving comparable matters, Austal considered a negotiated resolution reasonably achievable,” reads the statement. “Based on communications with the Department of War in the USA last week, Austal USA concluded that accelerated contractual relief will not be provided at this time.”
Without the adjusted contract relief from the Pentagon, Austal was prompted to adjust its earnings outlook from profit to loss.
“These matters relate only to certain surface shipbuilding contracts. Other support and module manufacturing activities continue to operate with strong profitability, including the submarine modules Austal USA is building for the US Navy’s critical nuclear submarine programs,” reads the filing.
In the same filing, Austal detailed Hanwha Defense USA’s non-binding bid to buy the U.S. shipyard from parent Austal. The offer would be contingent on a four-week examination of the U.S. shipyard by Hanwha.
“Any deal will be contingent on due diligence that permits a thorough evaluation of Austal USA’s operations and financials, including newly disclosed information,” Hanwha spokesman James Hewitt told USNI News in a Monday statement. “Hanwha has made it a priority to significantly contribute to revitalizing American shipbuilding and is exploring a range of options to expand our footprint in the United States.”
The Korean company owns a 19.9 percent stake in the Australian parent Austal. Hanwha has been expanding its operations in the U.S. and bought the Philly Shipyard from Norwegian parent Anker ASA in 2024.
In its filing, Austal USA said the deal would be contingent upon U.S. regulators and the Committee on Foreign Investment in the United States as well as the Defense Counterintelligence and Security Agency
Austal USA was established in 1999 in Mobile and built the aluminum Independence-class Littoral Combat Ship and the Spearhead-class expeditionary fast transport. The yard expanded to steel to build T-ATS, the AFDM and the Coast Guard Heritage-class Offshore Patrol Cutter.
In addition, Austal has established a submarine module manufacturing facility in Mobile in collaboration with General Dynamics Electric Boat. Austal is also constructing a second major submarine module facility in Alabama and has a ship repair facility in San Diego.
