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Naval shipbuilder Austal (ASX:ASB) is the subject of a takeover offer from a South Korean company. It is one of only two major shipbuilding hubs left in Australia.
Australia lost manufacturing of Ford, Mitsubishi and Holden in recent years, after it was deemed uneconomical to continue building cars on home soil.
South Korean shipbuilder Hanwah has made a bid to acquire Austal, which has a complex in the WA suburb of Henderson, which has been deemed important to building and maintaining Australian Defence Force fleets. The offer equates to $2.825 a share, when Austal closed at $2.40 (April 11).
Austal has in recent months been promised work to build medium and heavy Army Landing Craft, subject to government negotiations.
HotCopper contacted the Treasury and Defence Departments for comment as to whether it would support the sale of Australia’s shipbuilding capabilities. A spokesman from Defence said:
“Questions on this matter should be addressed to Hanwha and Austal. It would not be appropriate for Defence to provide comment.”
And, from the Treasurer’s office:
“All significant foreign investment proposals are screened by the independent Foreign Investment Review Board. The Government doesn’t comment on individual foreign investment screening cases.”
The bland comments coming as there’s building pressure for greater scrutiny on signficant mergers and acquisitions.
So what happens if it falls into foreign hands? And, does Australia need shipbuilding capabilities on home soil? HotCopper’s Fouad Haidar interviews international business and finance analyst Tariq Al-Rifai.
