South Korea's Hanwha has put forward a preliminary offer to buy Austal USA for up to $1.2 billion. This deal could give the Korean defense giant control over one of the largest shipbuilders in the U.S., particularly as the government aims to boost domestic shipbuilding capacity.
On Monday, Hanwha Defense USA confirmed that it has submitted a non-binding offer to acquire Austal's operations in the U.S. Any potential transaction will be contingent on further evaluation.
“Hanwha Defense USA has made this initial offer to acquire Austal’s U.S. business,” said spokesman James Hewitt. “It's important for us to help revitalize American shipbuilding, and we're looking at several options to grow our presence in the United States.”
Austal disclosed that Hanwha's offer values its U.S. operations between $1.05 billion and $1.20 billion, excluding debts and cash. The proposal involves Austal USA's business and operations but does not include its shares in publicly traded Austal Limited or the company’s shipbuilding activities in Australia, the Philippines, and Vietnam.
The Austal board believes the proposal deserves further consideration and has given Hanwha four weeks to conduct due diligence once they receive the necessary information. Hanwha will also be allowed to communicate with key government clients, including the U.S. Navy and Coast Guard.
Any deal will likely face significant regulatory scrutiny due to Austal USA’s involvement in sensitive U.S. defense projects. Required approvals may involve reviews by the Committee on Foreign Investment in the U.S., the Defense Counterintelligence and Security Agency, and U.S. antitrust authorities.
This approach comes during a difficult financial period for Austal USA, which is grappling with major issues related to several U.S. government shipbuilding contracts.
Austal expects its U.S. operations to report an EBIT loss of around $175 million for fiscal 2026, as it will not receive expedited help for certain older contracts. These contracts include its Towing, Salvage and Rescue Ship (T-ATS), Auxiliary Floating Dry Dock Medium (AFDM), and Landing Craft Utility (LCU) programs.
These financial challenges have led Austal to change its overall outlook dramatically. The company now forecasts an EBIT loss of about $113 million for fiscal 2026, down from its previous projection of a $110 million profit.
Despite these losses, Austal remains a key player in the U.S. naval shipbuilding sector. Its shipyard in Mobile, Alabama, has expanded from aluminum construction into steel shipbuilding and is involved in various Navy and Coast Guard programs.
One of these is the Coast Guard’s Offshore Patrol Cutter program. Austal USA is constructing the second-stage OPCs under a contract that may cover up to 11 cutters worth approximately $3.3 billion. The first of these cutters, named Pickering (WMSM 919), started construction in 2024, with a delivery date set for 2027.
Austal also produces submarine modules for the U.S. Navy’s nuclear submarine projects. Despite difficulties with its surface ship contracts, this part of the business remains profitable.
For Hanwha, acquiring Austal USA would significantly enhance its presence in American shipbuilding.
Hanwha purchased the former Philly Shipyard in late 2024 and has since made it a focal point of its maritime ambitions in the U.S. This facility is currently involved in the five-ship National Security Multi-Mission Vessel program and is expanding into both commercial and government projects.
Recently, Hanwha Philly Shipyard and TOTE Services were chosen to provide new Missile Range Instrumentation Vessels for the Trump administration's Golden Dome missile defense program. The first vessel, named Golden Defender, is set to be delivered in 2030.
Hanwha has also announced plans to invest billions in expanding the Philadelphia yard to strengthen its role in the U.S. shipbuilding sector.
Acquiring Austal USA would provide Hanwha with a second major U.S. shipyard and enhance its involvement in Navy and Coast Guard construction, especially as the Trump administration aims to boost domestic shipbuilding capabilities and attract more private investment in this area.
However, a sale is not guaranteed for Austal. The company has stressed that Hanwha’s offer is still indicative, non-binding, and conditional. There is no assurance that the due diligence process will lead to a revised offer or a definitive agreement.
Austal’s board will assess any future proposals based on the “inherent value” of Austal USA and the interests of its shareholders.