Treasurer Jim Chalmers has approved South Korean defence company Hanwha's bid to double its stake in Australian shipbuilder Austal to 19.9 percent, subject to strict conditions. The decision follows over 10 months of scrutiny by the Foreign Investment Review Board (FIRB) and consultations with national security agencies.
Mr Chalmers stated the decision was not taken lightly and involved extensive consultation. He emphasized that the conditions would protect Australia's sovereign interests, including limits on Hanwha's access to sensitive information and board appointments. Hanwha will remain a minority shareholder and cannot increase its stake beyond 19.9 percent.
The approval comes amid diplomatic sensitivities with Japan, which had raised concerns over the bid due to Austal's role in building Japanese Mogami frigates and its involvement in AUKUS. However, diplomatic sources indicated that Australia reassured Japan by ensuring protections for Japanese intellectual property.
Austal CEO Paddy Gregg said the company respected the decision and would review opportunities and risks from any further partnership proposals. Hanwha Aerospace CEO Jae-il Son expressed pleasure with the decision, stating it would enable strategic collaboration in global defence shipbuilding while respecting the conditions.
