Hanwha Ocean has halted its move to acquire Australian defense and shipbuilding company Austal.

“We have decided to stop a discussion with the management and board of directors of Austal regarding the acquisition of Austal as of today and notified the other party of it,” Hanwha Ocean said in a public disclosure on Sept. 25.

Hanwha Ocean has clarified its position that it has been in continuous negotiations with Austal to proceed with the acquisition of Austal but has not been able to hammer out an amicable agreement and has suspended its acquisition move.

In particular, a disagreement arose over Austal’s demand for advanced payment of a commission of AUD 5 million (approximately 4.5 billion won) before due diligence.

Hanwha Ocean reportedly abandoned the takeover of Austal, considering the opportunity cost of giving up the acquisition deal after paying the commission and conducting due diligence.

Earlier, in April, Hanwha Group offered AUD 1 billion (about 888 billion won) to acquire Austal and designated investment bank UBS as its advisor.

Austal specializes in designing, building and supporting battleships and commercial, producing naval ships, high-speed ferries, offshore wind farms, and supply vessels for oil and gas platforms.

Source: Business Korea