81 F
73.1 F
71.9 F
68.3 F

Austal rejects takeover offer from South Korean company

Australian shipbuilder, Austal, has rejected a substantial takeover offer from a large multi-profile business conglomerate headquartered in South Korea. Austal, which operates AustalUSA in Mobile, reportedly received an offer from Hanwha Ocean worth approximately $662 million.

Leadership at Austal said that the transaction wouldn’t likely gain regulatory approval.

“The Austal board, together with its advisers, has considered the Indicative proposal in detail and engaged with Hanwha in relation to whether the transaction described in the indicative proposal would obtain the relevant regulatory approvals in Australia and the USA to enable it to proceed,” Austal revealed in a statement. “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.”

David Kim, executive vice president at Hanwha, said in a statement that the idea that the Foreign Investment Review Board would reject Hanwha’s acquisition is completely incorrect.

“Hanwha has already obtained FIRB approval for prior investments in Australia and has a proven track record of investment in Australia’s defence industrial base, being the contracted supplier of infantry fighting vehicles, self-propelled howitzers and ammunition resupply vehicles with significant investment in a Geelong manufacturing facility that employs local workers.”

Danny O’Brien, President of Corporate Affairs for Hanwha, believes that his company still has much to offer Austal.

“Hanwha is growing its footprint in the defense and energy sectors in the U.S.,” said O’Brien. “The company is poised to bring decades of experience and innovation to the U.S. shipbuilding industry that will grow Austal’s operations while meeting the needs of the U.S. Navy and Coast Guard.”

According to the annual Defense News rankings  ,the proposal would see the world’s 26th largest defense contractor add the 74th largest defense contractor to its portfolio.

Austen Shipley is a staff writer for Yellowhammer News.

Don’t miss out!  Subscribe today to have Alabama’s leading headlines delivered to your inbox.