The South Korean conglomerate Hanwha, which is also a major player in shipbuilding, is pressing ahead with its acquisition of the Australian shipyard group Austal.
According to a recent announcement, the equivalent of around 232.9 million dollars is to be invested.
The capital is to be invested in an Australian subsidiary of Hanwha. The aim is to expand its presence on the global market, according to the South Korean news agency Yonhap. The move is seen as preparation for a possible takeover of the Australian shipbuilder Austal.
Last year, it was announced that Hanwha Ocean, formerly known as Daewoo Shipbuilding & Marine Engineering, was looking to acquire Australian ship builder Austal as part of its strategy to acquire shipyards abroad for potential warship and MRO business.
Austal is headquartered in Australia but generates approximately 90% of its revenue from its US subsidiary. It operates under a special security agreement that allows it to work on sensitive US defense programs despite foreign ownership. In addition, the company has subsidiaries in the Philippines and service centers in Singapore and is also active in the ferry and high-speed catamaran market. The Australian government had already stated that it had no objections to a possible takeover bid by Hanwha for Austal. The shipyard itself had initially been rather skeptical.
Austal had confirmed that Hanwha had submitted a takeover bid. The South Koreans are offering AU$2.825 ($1.83) per share. However, Austal’s management initially rejected the offer, citing regulatory concerns in particular.
Now Hanwha Systems and Hanwha Aerospace announced in separate statements that they will invest 202.7 billion won and 64.2 billion won respectively in their Australian subsidiary HAA No. 1 PTY LTD through a capital increase. Both companies said the capital increase is for expansion into global markets, including Australia.
The acquisition is seen as part of Hanwha’s broader strategy to secure contracts for warships and maintenance, repair and overhaul services in markets such as the United States.
