Hanwha Defense USA has made a preliminary offer to acquire Austal USA for an indicative enterprise value of $1.05 billion to $1.20 billion, with the proposal subject to due diligence and other conditions.
The indicative, non-binding and conditional offer covers Austal’s US business entities and operations on a cash- and debt-free basis, subject to a normalized level of working capital and other customary transaction adjustments.
Austal said the proposal was received before its latest market and trading update and is conditional on Hanwha conducting due diligence on Austal USA, including reviewing the terms and economic details of the company’s US contracts.
The Austal Board and its advisers have assessed the proposal and determined that it merits further evaluation. The board has therefore authorized Hanwha to undertake due diligence on Austal USA.
Importantly, the proposal does not include Austal’s publicly traded shares or its core Australasian operations. Austal said these businesses, including its sovereign shipbuilding mandate in Australia, would remain intact under the proposal.
Should a more certain proposal be received from Hanwha, that proposal will be assessed by the Austal Board, having regard to the inherent value of Austal USA, and acting in the best interest of all Austal shareholders, it was highlighted.
In a separate statement, Hanwha Defense USA confirmed that it had made a preliminary, non-binding offer for Austal’s US business.
“Any deal will be contingent on due diligence that permits a thorough evaluation of Austal USA’s operations and financials, including newly disclosed information,” Hanwha Defense USA spokesman James Hewitt said.
Hanwha added that it is seeking opportunities to expand its US presence as part of its efforts to contribute to the revitalization of American shipbuilding.
The proposed transaction would therefore involve Austal USA rather than Austal Limited as a whole, with any potential deal dependent on the outcome of due diligence and subsequent negotiations.
Austal USA operates in the US defense shipbuilding market and is involved in the construction of vessels for the US government. The company’s US operations are separate from Austal’s Australasian business, which would not form part of the proposed transaction.