Street Talk (AFR)Shipbuilder Austal’s Korean suitor clears key...

Street Talk (AFR)
Shipbuilder Austal’s Korean suitor clears key hurdle for bid

South Korea’s Hanwha has been dogged in its chase of Austal, the shipbuilder capitalised at $2.4 billion on the ASX. Now, it has scored a major win. Austal chairman Richard Spencer.

Street Talk can reveal Hanwha has received approval from the Committee on Foreign Investment in the United States (CFIUS), which has the power to block flow of any overseas capital into such businesses on national security grounds. Hanwha is understood to have received CFIUS’s nod just to hold a 19.99 per cent stake in Austal but also to go to 100 per cent.

Hanwha still has to appease Australia’s Foreign Investment Review Board, but sources suggested it’s hard to see the local regulator blocking the Korean now that CFIUS has green-lit its approach. Of note, Hanwha’s win at CFIUS flies in the face of Austal chairman Richard Spencer’s earlier proclamation that the regulator would never approve the deal.

Hanwha made its first approach to Austal in 2023. Since then, it has made three more non-binding approaches and conducted preliminary approval reviews in the United States and Australia. It finally walked away in September, citing Austal board’s reluctance to let it complete due diligence – only to return six months later.

In March, Austal spent nearly $180 million to acquire 9.9 per cent of Austal in a sharemarket raid run by Jarden, and has control over another 9.9 per cent via a total return swap.Its return has boosted Austal shares by 86 per cent this year.