The Austal Ltd (ASX: ASB) share price soared 7.6% to a new all-time high of $6.21 on Tuesday.
The price surge follows news reports that South Korean company Hanwha Corp has secured US approval to buy 100% of Austal shares.
While Austal disputed these reports today, the market is clearly excited by Hanwha's continuing interest in Australia's largest defence shipbuilder.
Let's investigate.
Image source: Getty Images
Austal share price rips to new record
Austal is an Australian global defence shipbuilder and prime contractor.
It owns shipbuilding yards in the US, Australia, Vietnam, and the Philippines as well as service centres around the globe.
Austal's clients include the Australian Navy and the US Navy.
In March, Austal conducted a $200 million institutional placement to fund the expansion of its US shipyard in Alabama.
Hanwha is a diversified Fortune 500 company with interests in defence, aerospace, clean energy, finance, and retail.
It's already one of Austal's biggest shareholders with a 9.9% stake.
Hanwha has a further 9.9% economic interest through a cash-settled total return swap.
Hanwha has previously made a play for Austal, offering $2.825 per share in cash to take over the company in April last year.
In a statement today, Austal advised that Hanwha has sought approval from Australian regulators to lift its stake to 19.9%.
Acquiring a 19.9% stake would be a strategic move to achieve more influence over Austal's future.
It's also just below the 20% threshold at which a shareholder must make a formal takeover offer under the Corporations Act.
The Foreign Investment Review Board (FIRB) is still considering the application.
Meanwhile, Austal has refuted Hanwha's claim that it has received approval from the Committee on Foreign Investment in the United States (CFIUS) to increase its stake in Austal shares by up to 100%.
Austal said that after Hanwha advised it of the approval, Austal sought independent verification from the CFIUS.
Austal said:
Based on informal discussions to date, Austal understands that the approval granted by CFIUS is different to that claimed by Hanwha.
Austal is seeking written confirmation from CFIUS and will update shareholders on receipt of that information.
Hanwha's three defence industry divisions were at the 2025 International Maritime Defense Industry Exhibition (MADEX) this month.
The exhibition showcased Hanwha Ocean's shipbuilding and submarine expertise, Hanwha Systems' combat management systems, and Hanwha Aerospace's lithium-ion energy storage systems.
This collaboration signals Hanwha's strategic ambition to become a global total defense solutions provider by delivering integrated and mission-ready technologies for modern naval operations.
What else is news with Austal?
As we reported earlier, Austal shares will enter the benchmark S&P/ASX 200 Index (ASX: XJO) after the June quarter rebalance.
At the Macquarie Conference last month, Austal said it had a record order book (including options) worth $14.2 billion in hand.
That includes two major US contracts worth about US$600 million awarded in September.
Both contracts support the US Navy's plan to deliver one Columbia-class submarine and two Virginia-class submarines per year.
Austal also said it has 51 ships under construction or scheduled for construction today.
Austal told the conference attendees it was "well-positioned to grow in the evolving naval market".
Many nations, including Australia, are facing growing pressure from the Trump Administration to increase defence spending.
For 1H FY25, Austal reported a 109% surge in net profit after tax (NPAT) to $25.1 million.
The shipbuilder received revenue of $825.7 million, up 15.1% year-over-year.
