Hanwha Capitalises On Austal USA’s $79.7 Million Loss with $1 Billion Buyout Offer

South Korean shipbuilder Hanwha has submitted a $1 billion bid to acquire Austal USA, the American subsidiary of Australian shipbuilder Austal.

The non-binding offer requires a 4-week review of its operations and finances, as well as approval from U.S. regulators, the Committee on Foreign Investment in the United States (CFIUS), and the Defence Counterintelligence and Security Agency.

Austal has also revised its financial outlook and shifted from a projected $77.6 million profit (AUD 110 million) to a $79.73 million loss (AUD 113 million).

This loss comes from contract disputes which remain unresolved with the U.S. Department of Defence over surface ship projects at Austal’s shipyard in Mobile, Alabama.

Austal had been seeking financial relief from the U.S. Navy, citing design defects in provided specifications and changing requirements for three programs, including the T-ATS, which is to build Navajo-class tow, salvage, and rescue ships; AFDM for Auxiliary Floating Dry Dock Medium; and LCU 1700 for the Landing Craft Utility 1700.

Although negotiations continued for a long time, U.S. defence officials recently informed the company that financial relief would not be given.

Austal had also clarified that financial losses are only in some surface shipbuilding programs and other projects remain highly profitable, including the contract to build components for the U.S. Navy’s nuclear submarine program.

Hanwha currently has a 19.9% stake in Austal’s parent company and had acquired the Philly Shipyard in 2024 to expand its manufacturing in the United States.

Established in 1999, Austal USA originally focused on aluminium vessels, such as the Independence-class Littoral Combat Ship and Spearhead-class transports.

It then entered into steel shipbuilding, rolling out Coast Guard cutters and then tried submarine module manufacturing with General Dynamics Electric Boat, and also set up ship repair services in San Diego.