AUSTRALIAN shipbuilder Austal said on Tuesday that Hanwha Group had offered to buy its US operations for up to $1.20 billion as the South Korean conglomerate seeks to expand in the American defense market.

Austal shares rose more than 16 percent, logging their best intraday jump since mid-February. The stock was the top gainer on the benchmark ASX 200 index, which traded 0.2 percent higher.

Hanwha Defense USA offered to buy Austal’s US entities and operations for $1.05 billion to $1.20 billion, a move that would deepen its push into the US defense market after acquiring the Philly Shipyard in Philadelphia in 2024.

“Hanwha has made it a priority to significantly contribute to revitalizing American shipbuilding and is exploring a range of options to expand footprint in the United States,” Hanwha Defense USA spokesman James Hewitt said.

Austal, Australia’s biggest shipbuilder, designs and builds vessels for the US Navy and Coast Guard. Its US business generated 90 percent of the group’s AU$108.5-million pretax profit in the 2025 financial year.

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The offer does not include Austal’s core operations in Australia, the Philippines and Vietnam or its Sydney-listed shares. It will also not affect its Strategic Shipbuilding Agreement with the Australian government.

Austal has agreed to give the South Korean conglomerate four weeks to conduct due diligence, it said.

In December, the Australian government approved Hanwha’s proposal to raise its stake in Austal to 19.9 percent from 9.9 percent, subject to conditions on data access and security.

LSEG data showed an entity owned by Hanwha still owned a 9.9-percent stake in Austal, while a private entity owned by billionaire Andrew Forrest held a 19.28-percent stake.

Hanwha Group told Reuters it owned a 19.9-percent stake in Austal, without disclosing further details. Austal said Hanwha owns a 9.9-percent stake and a cash-settled equity swap arrangement for another 9.9 percent, which Hanwha also confirmed.

Austal said its US business was expected to book an operating earnings loss of AU$175 million in 2026, reflecting higher losses on shipbuilding programs.

That would leave the group with an operating loss of AU$113 million in 2026, compared with earnings of AU$113.4 million a year earlier.