Hanwha Group 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 says it 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.
The company said that 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,” said David Kim, Hanwha's Executive Vice President.
The company also said that 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,” Kim added.
Hanwha said it is a "credible buyer" with a "highly competitive" offer. It said the the company’s rationale for the interest in Austal include the strengthening of alliances.
"Hanwha is a known entity and respected ally to both Australia and US defence leaders with a strategic presence in the Indo-Pacific. The 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," it said.
The company also said the deal would support 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," a spokesperson added.
Pointing to Austal's values, Hanwha said it 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".
"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," the spokesperson said.
"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."