Hanwha Ocean bid for Austal rejected over regulatory approval worries

Austal confirmed that Hanwha Ocean, Daewoo Shipbuilding & Marine Engineering (DSME) had made an unsolicited bid of A$2.825 per share for the company.

Austal, however, flagged issues with multiple approvals that would be required for such a deal to go through given the company is a designer and builder of vessels for the Australian and US navies.

Regulatory approvals would include Australia’s Foreign Investment Review Board (FIRB), the Committee on Foreign Investment in the United States (CFIUS) and the US Defense Counterintelligence and Security Agency.

Austal also noted a Memorandum of Understanding (MoU) with the Australian Department of Defence signed in November last year to negotiate a strategic shipbuilding agreement. In announcing the MoU the Department of Defence said: “A sovereign and enduring naval shipbuilding and sustainment industry at Henderson is central to the Government’s commitment to ensuring continuous naval shipbuilding in Australia and delivering the capabilities needed to keep Australians safe.”

Austal said its board and advisors had considered the proposal from Hanwha and whether it would obtain the required approvals.

“At present Austal is not satisfied that these mandatory approvals would be secured, however the company is open to further engagement if Hanwha is able to provide certainty on whether a transaction would be approved,” Austal said.

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