Australian shipbuilding giant Austal shot down a takeover offer worth $662 million from South Korea’s Hanwha Ocean. The deal was deemed unlikely to gain approval from regulators due to Austal’s crucial role in building military vessels for both Australia and the United States.
Late last year, Austal signed an agreement with the Australian government to become a strategic shipbuilder, further solidifying its position as a key player in national defense. The company also builds and maintains ships for the U.S. Navy.
Fearing roadblocks from government agencies like Australia’s Foreign Investment Review Board and the U.S. Committee on Foreign Investment in the U.S., Austal rejected Hanwha’s offer. The deal also needed approval from the U.S. Defense Counterintelligence and Security Agency due to national-security concerns.
Hanwha, one of South Korea’s top defense firms, expanded its interest in naval shipbuilding when it acquired Daewoo Shipbuilding & Marine Engineering (DSME). The company scooped up the unit following HD Hyundai’s failure to gain regulatory approvals in late 2022. The unit is the third largest shipbuilder in the world and produces commercial ships such as LNG carriers and warships such as frigates and submarines. The operation has subsequently been renamed Hanwha Ocean and operates under the aegis of Hanwha Aerospace, which is now the focus of everything defense-related for the firm.
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