Hanwha lobbed the tentative $US1.05 billion to $US1.2 billion ($A1.5 billion to $1.7 billion) offer for Austal's US business, which is equivalent to more than three-quarters of the shipbuilder's 2025 revenue of $1.8 billion.
Austal's board has told shareholders the proposal deserves further evaluation and has approved the defence and renewable energy-focused group to Hanwha to conduct due diligence on Austal USA.
Given the US location, the potential takeover won't face Australian Foreign Investment Review Board scrutiny.
Hanwha already owns roughly one-fifth of Austal through shares and a cash-settled equity swap deal.
It increased its stake from 9.9 per cent after winning permission from federal Treasurer Jim Chalmers in December 2025 following an investment board review.
The permission was subject to conditions surrounding Hanwha's access to and storage of sensitive information and its board nominations.
Austal noted that no publicly traded shares in Austal or any of its core Australasian operations were included in the proposal.
"Austal's sovereign shipbuilding mandate and high-performing Australasian business remain fully intact and (will) continue to generate value for shareholders," the board said on Tuesday.
The news sent Austal's share price rocketing almost 19 per cent higher to $4.57, which was a near two-month high.
The offer came as the shipbuilder flagged a $175 million hit to its balance sheet over an unresolved US Navy contract issue that would likely drag the company into a $113 million full-year loss, wiping out a previously forecast $110 million profit.
"Austal USA will continue to engage with the US government with a view to reaching a mutually acceptable resolution, if possible," the board said.
"Austal retains a robust balance sheet and liquidity position with cash at bank of $312 million at 30 June 2026 and a net cash position of $185 million."
The shipbuilder will release its 2025/26 results on August 29.
Hanwha has been contacted for comment.
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