Home > Business > Industry

Hanwha ups Austal stake in key step toward U.S. Navy shipbuilding

Published: 12 Dec. 2025, 19:42 Updated: 14 Dec. 2025, 18:11

The future USS Gabrielle Giffords is shown during its launch sequence at the Austal USA shipyard in Mobile, Alabama, in this file photo from Feb. 25, 2015. [REUTERS/YONHAP]

Hanwha Group is set to become the largest shareholder of Austal, an Australian global defense company that builds warships for the United States, marking a key step toward entering the U.S. naval shipbuilding market.

The Australian government has approved Hanwha’s local subsidiary — a joint venture between Hanwha Aerospace and Hanwha Systems — to increase its stake in Austal from 9.9 percent to 19.9 percent, according to Bloomberg on Friday.

With the approval, Hanwha surpasses Tattarang Ventures, which holds 17.1 percent, to become Austal’s largest shareholder.

“Hanwha would remain a minority shareholder under this proposal and cannot increase its shareholding above 19.9 percent,” said Australian Treasurer Jim Chalmers in an interview with Bloomberg.

The 19.9 percent cap is understood as a measure to protect Australia's strategic shipbuilding industry and ensure the government's sovereign interests.

In March, Hanwha acquired a 9.9 percent stake in Austal through its local unit for 183.34 million Australian dollars ($122.23 million), according to Reuters. The group later applied for approval from the Australian and U.S. governments to raise its stake to 19.9 percent.

Washington said in June that it had no objection to Hanwha acquiring up to 100 percent of Austal.

President Lee Jae Myung, center, Pennsylvania Gov. Josh Shapiro, third from left, top Korean government officials and executives of Hanwha Ocean pose for a photo during Lee's visit to Hanwha Philly Shipyard in Philadelphia on Aug. 27. [YONHAP]

Last year, Hanwha attempted a full acquisition of Austal for 1.02 billion Australian dollars, but the deal collapsed due to opposition from the Australian firm's management. Hanwha then shifted to a strategy of strategic investment.

“This opens up a strategic opportunity for Hanwha and Austal to cooperate in the global defense shipbuilding sector,” said Son Jae-il, the CEO of Hanwha Aerospace. “We are pleased that this decision came after rigorous review by Australia’s Foreign Investment Review Board and the treasurer, and that we met the Australian government’s expectations.”

Hanwha's increased stake in Austal is expected to bolster the MASGA, or "Make American Shipbuilding Great Again," project, which aims to revitalize the U.S. shipbuilding industry.

Founded in 1988, Austal manufactures naval vessels, high-speed ferries and ships for offshore wind farms and oil and gas platforms. The company operates a U.S. subsidiary at its Mobile shipyard in Alabama, where it builds littoral combat ships and expeditionary fast transports for the U.S. Navy and Coast Guard.

A view of Austal's Henderson Shipyard in Western Australia [JOONGANG ILBO]

It also operates a maintenance, repair and overhaul facility in San Diego, California, and a research and development center in Charlottesville, Virginia. Austal USA is the market leader in small surface combatants and auxiliary ships for the U.S. Navy.

While Hanwha owns the Hanwha Philly shipyard in the United States, the facility focuses on commercial ships and requires upgrades, limiting its ability to enter the naval ship market.

By contrast, Austal’s Mobile yard already has the capacity to build warships, which is expected to accelerate Hanwha’s entry into U.S. Navy shipbuilding.

Some analysts say Hanwha’s stake in Austal could serve as a way to circumvent regulations under the U.S. Byrnes-Tollefson Amendment, which prohibits the construction and repair of Navy vessels overseas.

“The Australia-listed shipbuilder’s American operations could prove advantageous for Hanwha, which is keen to strengthen strategic partnerships in the U.S. and elsewhere amid a boom in the global defense and shipbuilding industries,” Bloomberg reported.

Hanwha Ocean's logo on the shipbuilder's offices in Seoul is seen on Oct. 15. [REUTERS/YONHAP]

However, some attention has been drawn to Chalmers’ comment that Hanwha’s access to and storage of sensitive information will be restricted.

“While Australia recognizes Hanwha’s 19.9 percent stake, it is unlikely to share warship-related technologies freely — a reflection of concerns that Asian firms may attempt to extract only the technology,” said Yang Jong-seo, the chief researcher at The Export-Import Bank of Korea's Overseas Economic Research Institute.

“Still, since Hanwha possesses independent naval shipbuilding capabilities, it should not face issues in constructing warships at Austal USA,” he added.

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
BY KIM HYO-SEONG [[email protected]]