South Korea’s Hanwha Defense USA has submitted a non-binding offer of $1.05 billion to $1.2 billion to acquire the US shipbuilding operations of Australian-based Austal Limited, the companies announced on August 11.
The proposed deal covers Austal USA’s shipyard in Mobile, Alabama, and its US support operations, including a second submarine module facility under construction in the state and a ship repair facility in San Diego. Austal’s core Australasian operations, including a 15-year Strategic Shipbuilding Agreement with the Australian Department of Defence, are excluded from the bid.
Austal has granted Hanwha a four-week due diligence period to review the US business, examine contract details, and engage with primary naval stakeholders including the US Navy, Coast Guard, and Department of Defense. The deal remains subject to regulatory approvals from the Committee on Foreign Investment in the United States (CFIUS) and the Defense Counterintelligence and Security Agency.
Austal USA builds the Navy’s Independence-class Littoral Combat Ships, Expeditionary Fast Transports, and new T-AGOS ocean surveillance ships. The yard also manufactures modular components for Virginia-class submarines and has been a key partner in the AUKUS trilateral security pact with Australia and the United Kingdom.
The offer came alongside a sharp earnings revision by Austal, which shifted its full-year profit guidance to a loss of A$113 million ($79.73 million USD), largely due to contract setbacks with the Navy’s Navajo-class Towing, Salvage, and Rescue ship program. Without adjusted contract relief from the Pentagon, Austal was forced to reverse its earlier profit outlook.
Hanwha’s bid builds on its aggressive strategy to expand its defense and industrial footprint in North America. The conglomerate already acquired Philly Shipyard in Philadelphia for $100 million in 2024 and secured Australian government approval to increase its stake in Austal Limited to 19.9 percent. Hanwha Defense USA spokesman James Hewitt said the company had made it a priority to contribute to revitalizing American shipbuilding.
The acquisition, if completed, would position Hanwha as one of the largest foreign-owned shipbuilders in the United States, operating yards on both coasts and in the Gulf of Mexico. Analysts say the deal could help address the US Navy’s longstanding shipbuilding backlog while raising questions about foreign ownership of critical defense industrial capacity.
South Korea has emerged as a major global shipbuilding power, with companies like Hyundai Heavy Industries, Samsung Heavy Industries, and Hanwha dominating commercial vessel construction. The Austal USA deal would mark Hanwha’s most significant US defense acquisition to date, signaling Seoul’s intent to deepen its role in allied military production.
Sources: Naval News, Breaking Defense, USNI News
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