Austal's revenues in 2024 declined 7% to AUD1.47 billion. (Austal/Janes)
Hanwha has ceased its bid to acquire Australian naval shipbuilder Austal, the South Korean group has confirmed. In a stock exchange filing on 25 September Hanwha said it has “decided to discontinue discussions” with Austal's management and board of directors about the takeover bid.
Austal also confirmed to Janes that it has received a letter from Hanwha explaining its decision to discontinue the talks.
An Austal spokesperson said, “When Austal informed its shareholders in April that it had received an indicative, conditional, non-binding offer from Hanwha, the company was very clear that the Austal board and advisers were not satisfied that mandatory approvals for the transaction to proceed could be secured by Hanwha. Hanwha's letter effectively confirms this evaluation.”
The bid in April was unsolicited and initially rejected by Austal because the company was not certain whether necessary government approvals to support the acquisition could be secured. However, at that time Austal said that it was open to talks with Hanwha if such certainties could be provided. The two companies have held discussions about a potential deal since April.
Hanwha told Janes in April that its bid for Austal was intended to strengthen its international competitiveness. The company also said that South Korea's close defence relationship with the US and Australia makes it a trusted partner.
However, the proposed deal would have been subject to high levels of scrutiny, given Austal's position as a designer and constructor of vessels for the Australian and US navies and the various ownership clauses contained in defence contracts.
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