South Korea's Hanwha Offers $1.2 Billion for Austal USA, a Builder of Navy Warships in Alabama

South Korea's Hanwha Defense USA has offered up to $1.2 billion to buy Austal USA, the Alabama shipyard that builds Littoral Combat Ships for the Navy and cutters for the Coast Guard.

Hanwha Defense USA spokesman James Hewitt confirmed the preliminary, non-binding offer Monday. "Hanwha has made it a priority to significantly contribute to revitalizing American shipbuilding and is exploring a range of options to expand our footprint in the United States," Hewitt said, according to Breaking Defense and gcaptain.

Austal, the Australian parent company, disclosed the offer values Austal USA at between $1.05 billion and $1.2 billion on a cash- and debt-free basis. The Austal board says it has "carefully assessed the Proposal" and determined it "merits further evaluation," granting Hanwha a four-week window to conduct due diligence, according to gcaptain.

This is not a buyout of the whole company. The offer covers only Austal USA's business and operations in Mobile. It excludes publicly traded Austal Limited shares and leaves Austal's shipyards in Australia, the Philippines and Vietnam untouched. Austal's statement is blunt about the point: the deal is designed so "Austal's sovereign shipbuilding mandate and high-performing Australasian business remain fully intact."

A Second Try After a Failed First Attempt

Hanwha already tried once to buy all of Austal. In April 2024 the company made a takeover bid for the entire firm, and Austal rejected it, citing worries that U.S. and Australian regulators wouldn't sign off, according to Breaking Defense. Hanwha disputed that regulatory concern was the real obstacle but pulled the offer in September 2024.

Hanwha didn't walk away from American shipbuilding. Hanwha announced in June 2024 that it would purchase the Philly Shipyard, and the acquisition closed in late 2024, according to Breaking Defense and gcaptain. The yard now builds the National Security Multi-Mission Vessel and, alongside TOTE Services, was selected to build Missile Range Instrumentation Vessels supporting the Golden Dome missile shield program, with the first vessel scheduled for delivery in 2030, per gcaptain.

Austal USA Faces Financial Pressure

Austal USA is in financial trouble. The company disclosed it expects an EBIT loss of roughly $175 million for fiscal 2026 after determining it will not get accelerated contractual relief on legacy contracts, according to gcaptain. The losses trace to three programs: the Towing, Salvage and Rescue Ship (T-ATS), the Auxiliary Floating Dry Dock Medium (AFDM), and the Landing Craft Utility (LCU).

That disclosure upended Austal's entire group guidance. The company now expects an approximately $113 million EBIT loss for fiscal 2026, a swing from its previous forecast of roughly $110 million in profit, per gcaptain. That's close to a quarter-billion-dollar guidance reversal in one announcement.

Despite the losses, Austal remains a major player in U.S. naval shipbuilding. Its Mobile shipyard is building second-stage Offshore Patrol Cutters for the Coast Guard under a contract covering up to 11 cutters potentially worth $3.3 billion, and it manufactures submarine modules for the Navy's nuclear submarine programs — work Austal says continues to operate profitably despite the surface-ship contract problems, according to gcaptain.

A shipyard losing that much money on legacy Navy contracts faces intense pressure to find a buyer or a partner with substantial capital. Hanwha, already building a U.S. shipbuilding footprint through Philly Shipyard, is positioned to be exactly that buyer.

The Regulatory Gauntlet

Any deal faces real scrutiny. Austal USA builds Independence-variant Littoral Combat Ships for the Navy and vessels for the Coast Guard, work that sits inside sensitive defense programs. gcaptain reported that required approvals could include the Committee on Foreign Investment in the United States (CFIUS), the Defense Counterintelligence and Security Agency, and U.S. antitrust regulators.

That's the same regulatory gauntlet that killed Hanwha's full-company bid in 2024. The difference this time is scope. Buying only the U.S. subsidiary, rather than the whole global company, may be a narrower and more digestible ask for CFIUS than absorbing Austal's entire international shipbuilding operation.

There's a legitimate case for skepticism here. Handing a Littoral Combat Ship builder and Coast Guard cutter yard to foreign ownership, even from a treaty ally like South Korea, raises fair questions about supply-chain control, technology access, and long-term leverage over U.S. naval production.

But Hanwha is not a stranger to the Pentagon. Hanwha Defense USA is a subsidiary of Hanwha Aerospace, which already operates inside the American defense industrial base through the Philly Shipyard, building vessels tied to the Golden Dome missile shield effort. CFIUS exists precisely to vet deals like this one, and Hanwha's 2024 bid collapsed in part because it couldn't clear that bar for the full company. Whether a narrower, U.S.-only deal clears it is now the open question.

Hanwha gets four weeks of due diligence once Austal hands over the requested financial and operational information, according to gcaptain. That includes access to key government customers, meaning Hanwha will be talking directly with the Navy and Coast Guard about the future of ships they've already contracted to build. Austal has emphasized the proposal remains indicative, non-binding and conditional, with no guarantee the process results in a definitive transaction. No transaction has closed, no regulatory filing has been submitted, and no timeline for a CFIUS review has been announced.