Christopher Pyne emerges as Hanwha’s man in Canberra
April 3, 2024
Hanwha Group, the Korean defence and aerospace conglomerate which has lobbed a $1 billion bid for ASX-listed Austal, has engaged former Coalition defence minister Christopher Pyne as it accelerates its lobbying efforts in Canberra.Pyne & Partners is the latest heavyweight consultancy advising Hanwha, which has had a significant presence in the local defence industry. Austal rejected Hanwha’s $2.825 per share offer, telling investors it is unlikely the Korean firm would be granted approval by officials in Australia and the United States given its sensitive defence contracts.But Hanwha, in a statement this week, rejected those suggestions, and said it was a credible bidder with long-term ambitions in Australia. It said Hanwha had extensive shipbuilding experience which would “expand Austal’s growth potential”.
Hanwha acquired control of Daewoo Shipbuilding and Marine Engineering this year. “Hanwha believes an Austal acquisition would benefit numerous stakeholders, including governments, shareholders, employees, and communities and is planning to go through all the proper processes towards a successful sale,” the company said.Mr Pyne was defence minister in the Morrison government and the defence industry minister when Malcolm Turnbull was prime minister. His firm has a list of major clients including the Business Council, Google and BGH Capital’s CyberCX. He has also signed the United Arab Emirates’ Canberra embassy as a client.Hanwha’s roster of heavyweight lobbyists has also included Peter Greenwood, a chief of staff to former Abbott and Howard government minister Eric Abetz among others, and Dale Walters, who has formerly worked for BAE Systems and Austal.The company has also engaged Carl Ungerer, according to a register maintained by the Attorney-General’s Department, and his firm Horizon GR. Dr Ungerer was a long-time diplomat and analyst at the Office of National Assessments before working for Simon Crean as the then Labor leader’s national security adviser.
Defence Minister Richard Marles declined to comment when asked whether Hanwha would be an acceptable owner of Austal, the only major defence firm listed on the ASX. “Questions on this matter should be addressed to Hanwha and Austal. It would not be appropriate for Defence to provide comment,” Mr Marles spokesman said.
Jennifer Parker, an associate at the Australian National University’s National Security College, said a complete takeover of Austal by Hanwha would “go against what the government has been saying in the last six months”.“Sovereignty is a term that’s often thrown around, not often well-defined,” said Ms Parker, a former naval officer. “But you would say that if Hanwha did a complete takeover of Austal, then that is not an Australian shipbuilding company, so I think that could be an issue. Australia does need to have a sovereign, however you define it, shipbuilding capability. It allows us to have a degree of control, which we require.”
The Defence Strategic Review last year found Australia needed a Defence Force focused on maritime and amphibious missions and armed with long-range strike weapons. New landing craft were identified as a priority and the Albanese government ordered a secondary review of the Navy’s surface fleet it said would be completed quickly.
Former treasurer Joe Hockey, who now runs defence-oriented advisory group Bondi Partners, has previously told The Australian Financial Review: “Just as we went with a begging bowl to offshore pharmaceutical companies during COVID and were thrown to the end of the queue, so too will we be thrown to the back of the queue when it comes to military industrial capacity in the event of conflict unless we build our own capacity.”Others say a deal would be of significant benefit for Australia. Mark Stevens, who advises private equity and other investment groups and specialises in defence, said the sale of Austal would be “massively positive for Defence maritime capability and most importantly, hugely accretive for Australian defence industry”.“
Austal’s site in Henderson needs a massive capital injection to bring it up to global standards,” he wrote in a post on LinkedIn. “Austal’s current board and shareholders have not demonstrated an appetite for that investment, so new ownership which lifts the quality of Austal’s infrastructure and ship build quality should be very welcome.”The Perth-headquartered Austal operates five shipyards in four countries including the United States, Australia, the Philippines and Vietnam. It has significant contracts with the US Navy, including one deal to design and build surveillance ships that could be worth up to $US3.2 billion ($4.8 billion).
Hanwha’s bid for Austal comes as the company aggressively expands into shipbuilding. Last year it acquired a controlling interest in Daewoo Shipbuilding & Marine Engineering, one of South Korea’s three major shipbuilders, for $US1.49 billion. Daewoo Shipbuilding subsequently changed its name to Hanwha Ocean.
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