Australia’s defence minister says government not concerned over possible shipyard takeover by Korean firm

The Australian government is not concerned by a South Korean company’s bid to acquire an Australian naval shipbuilder, Deputy Prime Minister and Minister for Defence Richard Marles confirmed on Wednesday, May 1.

Speaking to reporters in Melbourne following a meeting with his South Korean counterpart Shin Won-sik, Mr Marles said that security arrangements can be put in place should Hanwha Ocean be cleared to acquire Austal Australia.

The Defence Minister added that, while the government regards Austal as a “strategic” shipbuilder, the security arrangements will cover any sensitive technologies and intellectual property if the deal with Hanwha is allowed to proceed.

“Ultimately, this is a matter for Austal, [as] they are a private company,” Mr Marles concluded.

Austal had earlier rejected the bid, confirming its position on the deal in an April 2, 2024 press release.

Austal said that it received “an unsolicited, conditional, and non-binding indicative proposal” from Hanwha Ocean to acquire Austal by way of a scheme of arrangement. Under the indicative proposal, Austal shareholders would receive AU$2.825 (US$1.84) cash per Austal share.

“Hanwha’s Indicative Proposal is subject to numerous conditions, including due diligence, various regulatory approvals including Australia’s Foreign Investment Review Board (FIRB), the Committee on Foreign Investment in the United States (CFIUS) and the US Defense Counterintelligence and Security Agency, final approval of the Hanwha Board, the unanimous recommendation of the Austal Board and Austal shareholder approval,” the company said in the April 2 release.

Austal concluded that it is “not satisfied” that the mandatory relevant regulatory approvals in Australia and the US would be secured to enable the acquisition to proceed.

Hanwha Ocean’s parent company the Hanwha Group has dismissed Austal’s statements as “baseless,” saying that there is “no foundation of the claim” that the FIRB would reject the acquisition.

Hanwha added that it has “already obtained FIRB approval” for prior investments in Australia and has “a proven track record of investment in Australia’s defence industrial base,” having been awarded contracts for the supply of defence materiel such as armoured fighting vehicles and self-propelled artillery pieces to the country’s military.