Austal cast doubt on Hanwha Group’s assertion that US regulators approved the Korean conglomerate’s plans to expand its stake in the Australian defense contractor, highlighting ongoing uncertainty around the contentious investment.
Austal shares rose 6.8% Tuesday after Hanwha announced that the Committee on Foreign Investment in the United States had cleared it to hold up to 100% of the shipbuilder. However, Austal said informal discussions suggest the CFIUS approval differs from what Hanwha claims, and the company is seeking written confirmation.
The dispute underscores tensions surrounding Hanwha’s pursuit of the defense contractor, which builds warships for the US Navy from facilities in Alabama and California. Austal rejected a $1.02 billion takeover proposal from Hanwha last year, citing concerns the deal wouldn’t receive regulatory approval.
Hanwha currently holds a 9.9% equity stake and controls another 9.9% economic interest through a cash-settled swap arrangement. The company has applied to Australia’s Foreign Investment Review Board to increase its direct shareholding to 19.9%, making it Austal’s largest shareholder.
Austal operates as a key supplier to the US Navy, delivering Independence-class combat ships and holding contracts worth up to $3.2 billion for surveillance vessels. The regulatory scrutiny reflects the strategic importance of naval shipbuilding assets to national security interests.
