Hanwha Group bids for global shipbuilding leader Austal

Tue, 02 Apr 2024 18:22:00 +0800

SEOUL, South Korea, April 2, 2024 /PRNewswire/ -- Hanwha Group (Hanwha) has submitted an indicative offer to the Australian headquartered Austal board to acquire the global business of Austal, via a scheme of arrangement, subject to satisfactory due diligence. 

Hanwha brings important capabilities and investment to support Austal's business and local Australian communities while aligning with government objectives in Australia, the US and South Korea.

A recent media report which states concerns that the Australian government would not grant permission of the sale of Austal because it carries out defence contracting work for the Australian government is baseless. 

"There is no foundation of the claim that the Foreign Investment Review Board (FIRB) would reject Hanwha's acquisition of the company," David Kim, Executive Vice President at Hanwha said. Hanwha is respectful of the FIRB regulatory approval process, but is confident in its ability to obtain FIRB approval for the transaction. 

"Hanwha has already obtained FIRB approval for prior investments in Australia and has a proven track record of investment in Australia's defence industrial base, being the contracted supplier of infantry fighting vehicles, self-propelled howitzers and ammunition resupply vehicles with significant investment in a Geelong manufacturing facility that employs local workers."

Hanwha is a credible buyer with a highly competitive offer. The company's rationale for the interest in Austal includes:

• Strengthening alliances: Hanwha is a known entity and respected ally to both Australia and US defence leaders with a strategic presence in the Indo-Pacific. Hanwha's acquisition of Austal would build upon the countries' alliances and support Australia's national security as a partner and ally, building upon a series of relationships between key defence and security partners.
• Supporting government priorities: The deal is aligned with Australian government objectives outlined in the Independent Analysis of Navy's Surface Combatant Fleet, where Hanwha's capabilities and investment would accelerate delivery of critical programs and allow Australia to keep sovereign shipbuilding capabilities in Henderson, WA.
• Austal value: Hanwha has more than 50 years of experience in shipbuilding, which would expand Austal's growth potential and accelerate innovation (e.g. steel shipbuilding, production automation, Smart Shipyards, autonomous technology) while unlocking Austal value with increased investment and efficiencies.
• Long-term partner: Hanwha is a long-term partner with the intent to invest in the business along with the workforce and communities it supports, while bringing stability to the company with long-term partnership at the forefront of decision making. With a focus on local jobs, community partnerships and economic development, Hanwha is an ideal partner for stable long-term growth compared to other ownership models.

Hanwha believes an Austal acquisition would benefit numerous stakeholders, including governments, shareholders, employees, and communities and is planning to go through all the proper processes towards a successful sale.

Hanwha Group

Hanwha, founded in 1952, is a Fortune Global 500 company and South Korea's seventh largest business group with US$65.3 billion in total sales and US$179.7 billion in total assets.

As a global leader with a diversified business portfolio covering green energy; materials; aerospace, ocean & mechatronics; finance; and retail & services, Hanwha delivers future-ready solutions and impactful innovations that power industries and enrich communities.

Our relentless commitment to sustainability drives our bold innovation, allowing us to create transformative solutions for individuals, society, and the planet, creating a robust foundation for sustainable development and a brighter future for all.

Hanwha Ocean

Hanwha Ocean is a globally renowned maritime and shipbuilding company with 50+ years of shipbuilding experience, including a wide range of naval ships that include submarines, warships other naval support vessels, as well as commercial vessels, such as LNG Carriers and Very Large Crude oil Carriers. Hanwha Ocean's Okpo shipyard is the second largest and one of the most efficient shipyards in the world. Hanwha Ocean is a leader in building advanced warships and submarines for the Korean Navy and for many international clients, including UK, Norway, Indonesia, and Thailand. Capabilities include building of Destroyers, FFX-II Frigates, and various types of warships ranging between 1,000 to 10,000 tons. The company is also at the center of history with submarines of the Korean Navy. Since the building of KSS-I submarines in the late 1980s, the company has delivered KSS-III in 2021, designed and built independently for the first time in Korea, demonstrating Hanwha Ocean's expertise in submarine construction.

For further information please contact:

Jinwon Park
Senior Manager
Hanwha Group
(t) +82 10 3880 4541
(e) jinwonpark@hanwha.com

Andrew Joyce
Partner
Pyne & Partners
(t) +61 (02) 6108 3020
(e) aj@pyneandpartners.com.au