The Australian government has approved the South Korean group Hanwha to increase its stake in shipbuilder Austal.
Hanwha may increase its share from 9.9% to up to 19.9%. However, approval is subject to strict security and data protection requirements.
Finance Minister Jim Chalmers stated in a press release that Australia would not object to the project as it would also create additional protection mechanisms for Austal. The aim is to protect Australia’s strategic and sovereign interests in the company.
According to Chalmers, the decision was preceded by a comprehensive review process in which economic, security and other national interests were taken into account. Among others, the Ministry of Defense, the Ministry of Home Affairs, the Ministry of Foreign Affairs and Trade as well as national security authorities were involved.v Details on the financial scope of the transaction have not yet been published.
If Hanwha implements the increase in its stake, restrictions will apply to access to and storage of sensitive data. In addition, strict criteria have been set for the possible appointment of representatives to the Austal board. Hanwha had previously stated that it would seek to cooperate on shipbuilding projects and, if approved, would also consider a seat on the board.
Austal stated that the Board of Directors would carefully examine the opportunities and risks of possible partnerships and corresponding inquiries if these were officially submitted. The decision comes against the backdrop of a technology and supply chain agreement signed last month between Austal and state-owned ASC. ASC is a submarine builder involved in the development of Australia’s fleet of nuclear-powered submarines under the AUCUS defense pact with the US and UK.
Hanwha had already received approval from the US Committee on Foreign Investment (CFIUS) in June to increase its stake in Austal to 19.9%. Among other things, Austal supplies defense ships to the US Navy. According to the Australian government, Hanwha remains a minority shareholder and may not increase its stake in Austal beyond 19.9%.
