A foreign company would need some brave executives right now to try to buy a key shipbuilder for the U.S. navy. That’s probably one reason why South Korea’s Hanwha 
000880 has opted to land just a 9.9% stake – which it says it wants to double – in Australia-listed Austal 
ASB. Treading so gingerly makes sense with U.S. President Donald Trump’s nationalist and protectionist shift upending geopolitics.
Granted, all else being equal, Hanwha’s tactics would not be unusual. Suitors of companies Down Under often secure just under 20% in the open market before launching a bid for the rest. That’s partly because it gives them enough votes to stop a rival bidder from getting the required 75% approval from shareholders.
But Hanwha is late to the game: Austal already has a shareholder with a virtual blocking stake of 19.6% – Tattarang Ventures, the private investment vehicle of Fortescue Chair Andrew Forrest and his ex-wife.
Moreover, the South Korean group has already tried to board Austal several times. It first approached the company in 2023, according to the Australian Financial Review, when U.S. investors including Cerberus Capital Management were also in the water. But Austal only officially confirmed the interest last April, saying the conglomerate had offered A$1 billion ($634 million). Despite some encouraging noises from Canberra, the wannabe acquirer abandoned ship six months ago after Austal refused to parley, citing regulatory risk from both Down Under and Washington.
Thomson ReutersAustal is a popular takeover target
The prospect of overcoming that now looks even more murky. Sure, South Korea is a U.S. ally, and both Hanwha’s maritime unit, Hanwha Ocean 
042660 , and rival HD Hyundai 
267250 are allowed to service U.S. navy vessels.
But America’s navy inserted some stringent takeover clauses into contracts with Austal, whose two U.S. shipyards make smaller combat vessels and surveillance ships as well as modules for nuclear-powered and nuclear-armed submarines. And the Trump administration’s “America First” mantra may well look even less kindly on more foreign ownership of strategic assets.
Meanwhile, the knock-on effects of the White House’s upending of international affairs will reverberate Down Under. Austal is essentially the only domestic supplier to the country’s navy, so the prospect of its ownership heading abroad, even to an ally, is likely to be less acceptable than just a few months ago.
Hanwha will get a sense of how much has changed if it pushes to increase its voting stake to 19.9% as desired, since going above 10% requires approval from Canberra. That’s a less risky way to test the waters than a full-on takeover offer.
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CONTEXT NEWS
South Korean conglomerate Hanwha revealed on March 18 that it had bought a 9.9% stake in Australian shipbuilder Austal for A$183 million ($116 million). The buyer also used derivatives to take an economic interest in an additional 9.9% of Austal.
Austal only confirmed Hanwha’s interest in April 2024, saying it had received a non-binding takeover offer valuing the equity at A$1 billion.
In the term sheet for the stake purchase, reported by the Australian Financial Review, Hanwha said that it has “no intentions of submitting a control proposal, or making a takeover bid for the company, at this time.”