The Hanwha Group is aggressively securing production bases in the U.S. shipbuilding and defense markets, expanding its business territory. Following the acquisition of the Philly Shipyard in 2024, the company has now launched a bid to acquire the entire business entity and operating assets of Austal USA, which builds vessels for the U.S. Navy and Coast Guard.

Acquisition Proposal of Up to 1.7 Trillion Won... Securing Production Bases in the Eastern and Southern U.S.

To acquire Austal USA, Hanwha Defense USA submitted a non-binding, conditional proposal to Austal worth between USD 1.05 billion and USD 1.2 billion (up to approximately 1.7 trillion won) on a cash-free, debt-free basis. The Austal board has granted a four-week period to allow the Hanwha side to consult and conduct due diligence with key stakeholders, including the U.S. Department of Defense, Navy, and Coast Guard. Following the provision of data, the due diligence process is expected to take about a month.

Hanwha already holds a 19.9% stake in Austal's parent company. However, this transaction targets only the U.S. operations; Austal's businesses in Australia, the Philippines, and Vietnam are excluded from the acquisition. Upon completion of the acquisition, Hanwha will have multiple production bases spanning the eastern and southern United States.

Holds Core U.S. Navy Partnerships, Including Supply of Nuclear Submarine Modules

Headquartered in Mobile, Alabama, Austal USA employs approximately 3,500 people. It has a one-million-square-foot indoor production line capable of building both aluminum and steel vessels, and it also maintains vessel maintenance, repair, and overhaul (MRO) facilities in San Diego, including a 9,000-ton floating dry dock.

Austal USA has built 19 Littoral Combat Ships (LCS) and 15 Expeditionary Fast Transports (EPF) for the U.S. Navy, and is currently producing Offshore Patrol Cutters (OPC) and Landing Craft Utility (LCU) vessels. In particular, through a strategic partnership with General Dynamics Electric Boat (GDEB), it supplies core modules for Virginia-class and Columbia-class nuclear-powered submarines.

With the Trump administration adhering to the principle of building warships domestically, the acquisition of Austal USA is expected to serve as a bridgehead for Hanwha to directly secure major clients such as the U.S. Navy and Coast Guard and to overcome barriers to entry in the new construction market.

Risks and Regulatory Approval Variables... 'Decision to Be Made Based on Due Diligence Results'

For a successful acquisition, due diligence, the signing of a final contract, and review and approval from authorities such as the Committee on Foreign Investment in the United States (CFIUS) and the Defense Counterintelligence and Security Agency (DCSA) are essential. Given that the company conducts sensitive U.S. defense operations, the security approval process related to foreign ownership and control is cited as a critical variable.

Financial risks also remain. Austal USA is expected to record approximately USD 175 million in non-cash operating losses in fiscal year 2026, as it has not yet received accelerated relief measures from the U.S. Department of Defense for existing contracts, including towing, rescue, and salvage ships and landing craft. Austal explained, "This is merely an accounting result and does not affect our operational capabilities or long-term portfolio," adding that it plans to initiate formal cost claims procedures.

Hanwha's Comprehensive Expansion of the U.S. Value Chain

Hanwha Ocean acquired the Philly Shipyard in Philadelphia, Pennsylvania, in 2024, and has been promoting facility expansion and production capacity increases through large-scale investments. If it also acquires Austal USA, Hanwha will expand its business domain to include naval and Coast Guard vessels and submarine supply chains, in addition to commercial and specialty ships. Meanwhile, Hanwha Defense USA is also simultaneously pursuing a plan to build an ammunition and propellant manufacturing plant in Arkansas to supply the U.S. military.

A Hanwha Defense USA official stated, "We have submitted a non-binding preliminary proposal for the acquisition of Austal's U.S. business division," adding, "All transactions will be determined based on the results of the due diligence." The official further noted, "Hanwha considers contributing significantly to the revitalization of the U.S. shipbuilding industry as its top priority, and is exploring various measures for business expansion within the United States."