Hanwha Group has initiated the acquisition of Austal in Australia, which securities firms have evaluated as a move to utilize the U.S. shipyard owned by Austal.
According to the Financial Supervisory Service electronic disclosure system (DART) on the 18th, Hanwha Aerospace and Hanwha System will participate in a third-party allocation of paid-in capital conducted by the Australian entity HAA No.1. The total amount invested by Hanwha Aerospace and Hanwha System in HAA No.1 is 337.8 billion won, of which about 168.7 billion won is expected to be used to acquire a 9.9% equity stake in Austal.
According to Korea Investment & Securities and iM Securities, if HAA No.1 utilizes the remaining funds to purchase more shares of Austal, it could increase its equity stake to 19.9%, based on a per-share price of 4.45 Australian dollars, taking management rights premium into account. Currently, HAA No.1 has requested a review for additional equity acquisition from the Foreign Investment Review Board (FIRB).
Hanwha Group attempted to acquire Austal last year centered around Hanwha Ocean, but failed to narrow differences in opinions regarding the amount, thus the deal fell through. This time, they have changed the acquirer and equity stake, making another attempt.
Securities firms viewed Hanwha Group's desire to acquire Austal as a strategic move for the U.S. vessel business rather than the local business in Australia. Austal is considering utilizing the funds raised this time for the expansion of facilities at the Mobile shipyard in Alabama, USA.
Kang Kyung-tae, a researcher at Korea Investment & Securities, noted, "Austal USA's Mobile shipyard is where the U.S. Navy's littoral combat ships are built," adding that "Hanwha Ocean's shareholders (Hanwha Aerospace and Hanwha System) are working together to support the increase of military vessel construction facilities in the U.S." He further stated, "The local shipyard in the U.S. will be utilized for commercial ships, while the Mobile shipyard will be used for military vessels."
Byun Yong-jin, a researcher at iM Securities, evaluated that this investment demonstrates Hanwha Group's sincerity regarding the U.S. vessel business. However, he expressed some surprise that the acquirer does not include Hanwha Ocean, the shipbuilding company, and stated, "Considering that Hanwha Ocean is more likely to contribute during the operation of Austal than Hanwha Aerospace and Hanwha System, an explanation from the company seems necessary."