Hanwha's proposal to increase its shareholding in Austal from 9.9 per cent to 19.9 per cent has been granted approval after Treasurer Jim Chalmers agreed to the recommendation by the Foreign Investment Review Board (FIRB). The increase will be subject to strict conditions.
"Hanwha would remain a minority shareholder under this proposal and cannot increase its shareholding above 19.9 per cent," Chalmers stated.
"This decision ensures there are greater protections for our Strategic Shipbuilder and the Government’s sovereign interests in Austal."
For context, any foreign investment into an Australian company above 10 per cent needs FIRB approval.
The strict conditions which the increase in shareholding will be under include limitations on both Hanwha's access to sensitive information and the storage of this information plus stringent criteria on any Hanwha nominee to Austal's board.
The conditions will build upon the pre-existing ones that apply to Austal Defence Australia as Australia’s Strategic Shipbuilder.
In March of 2025, Hanwha made its move to become a major shareholder of Austal with the proposal of a 9.9 per cent increase. Previously, the South Korean company had made a couple of attempts to acquire Austal and also unsuccessfully bid for the Royal Australian Navy’s (RAN) General Purpose Frigates (GPF) program.
“As a strategic shareholder there will be a great opportunity for us to add significant value to Austal’s business, including in global defence and shipbuilding, supporting investment in Australia’s local manufacturing industry and capacity,” the former Global Chief Executive Officer (CEO) and President of Hanwha Defence, now President and CEO of Hanwha Defense USA, Michael Coulter, had said at the time.
According to the Government, there was an extensive process undertaken to approve the FIRB's recommendation, taking into account all relevant national security, economic and other national interest concerns. It has included advice from the Department of Defence, the Department of Home Affairs, the Department of Foreign Affairs and Trade and Australia's national security agencies.
"This decision and associated conditions will protect our sovereign interests in this capability and ensure the company can continue to grow, invest, and deliver continuous shipbuilding in Western Australia," Chalmers said.
"Australia welcomes foreign investment and operates a non‑discriminatory foreign investment framework to ensure foreign investment is in our national interest."
Minister for Defence Richard Marles had appeared previously unconcerned by the prospect of a Hanwha takeover of Austal.
“Ultimately, this is a matter for Austal. They are a private company,” Marles said when asked in 2024. “From the government’s perspective, we don’t have any concern about Hanwha moving in this direction.”
Now all that is left for the proposal to go ahead is for Hanwha to acquire approval from the US due to Austal’s defence contracts with the country.