Australia clears Hanwha’s bid to lift Austal stake, but with heavy safeguards

Australia has given the green light for South Korea’s Hanwha Group to almost double its shareholding in local shipbuilding major Austal, following months of review and national-security scrutiny. The decision, announced by Treasurer Jim Chalmers on Friday, allows Hanwha to increase its stake from 9.9% to 19.9%, but only under a set of stringent conditions aimed at protecting sensitive defence information.

Chalmers said the approval followed “a thorough and robust process” involving the Department of Defence, Home Affairs, Foreign Affairs and Trade, and multiple national-security agencies. The government’s stance reflects the strategic value of Austal, which builds defence vessels for both the Royal Australian Navy and the United States Navy, and is also involved in Australia’s emerging AUKUS submarine industrial base.

Under the ruling, Hanwha will face tight limits on how it accesses and stores confidential data, and any attempt to nominate a board representative will be assessed against strict criteria. Trading in Austal shares was briefly paused ahead of the announcement.

Hanwha has previously indicated that it hopes to partner with Austal on future shipbuilding programs and may seek representation within the company if the expanded shareholding is formalised. Austal, in its statement, said the board would carefully evaluate any partnership opportunities or board nominations once officially received.

The approval also follows last month’s agreement between Austal and state-owned ASC to collaborate on technology and supply chain initiatives for AUKUS-related submarine work. Hanwha, which has diverse interests spanning defence, energy and financial services, remains capped at a maximum stake of 19.9% and cannot pursue a controlling interest.

The move adds a new strategic layer to Austal’s international partnerships, particularly as the company continues to balance commercial growth with rising expectations under Australia’s defence-industrial strategy.