Hanwha Invests 400 Billion Won in Local Subsidiaries to Lead U.S. Defense Market with K9 Howitzer

Investment in Hanwha Defense USA and Hanwha Futureproof
Accelerating Entry into the Defense Industry with K9 Self-Propelled Howitzers and Philly Shipyard

Hanwha Group, which is accelerating its entry into the U.S. defense industry market, is injecting large-scale capital into its local subsidiaries. This move is interpreted as a strategic action to solidify orders for U.S. Navy vessels and to advance self-propelled howitzer exports for the U.S. Army, as well as to expand local production infrastructure through acquisitions such as Austal USA.

According to the industry on August 23, Hanwha recently decided to participate in the paid-in capital increases of its U.S. defense subsidiary Hanwha Defense USA and its investment-specialized entity Hanwha Futureproof. The total investment will reach up to 299 million dollars (approximately 415 billion KRW).

K9 Wheeled Self-Propelled Howitzer (K9MH). Hanwha Aerospace

Hanwha Defense USA is a wholly owned U.S. defense subsidiary of Hanwha Aerospace. Hanwha Futureproof was established for strategic asset investments in the U.S., with ownership divided among Hanwha Aerospace (50%), Hanwha Ocean and Hanwha Systems (each holding 18.75%), and Hanwha Solutions (12.5%).

First, Hanwha Aerospace will participate in Hanwha Defense USA's capital increase by investing 149 million dollars (206.8 billion KRW), acquiring 14,901 shares of common stock. This investment exceeds Hanwha Aerospace's cumulative funds previously injected into Hanwha Defense USA (159.7 billion KRW). Including the approximately 92.1 billion KRW invested in the last capital increase in April, this year's total injection amounts to 300 billion KRW.

Hanwha also plans to fully participate in Hanwha Futureproof's paid-in capital increase, which totals 150 million dollars (208.2 billion KRW). Based on existing ownership ratios, Hanwha Aerospace will fund half, or 75 million dollars, while Hanwha Ocean, Hanwha Systems, and Hanwha Solutions are set to split the remaining 75 million dollars among themselves.

The reason Hanwha is pouring substantial funds into its U.S. business and investment entities is to accelerate its penetration of the local defense market. In order to support visible progress and localization strategies in both land and naval defense sectors, the company determined it is necessary to secure working and investment capital in advance.

In fact, Hanwha Defense USA recently signed a prototype development contract with the U.S. Army for the Mobile Tactical Cannon (MTC) program. The contract covers the delivery of six K9 Wheeled Self-Propelled Howitzer (K9MH) prototypes, with a total contract value of 100,302,961 dollars (approximately 141.7 billion KRW). Once full-scale mass production begins, the project is expected to grow to as much as 10 trillion KRW.

Hanwha also plans to closely cooperate with the Korean government to ensure seamless supply of the K9MH and solidify its full-fledged entry into the U.S. defense market. In April, the company signed a three-year lease for an idle plant in Opelika, Alabama, ramping up its localization efforts in the ground defense sector.

In the field of naval defense, Hanwha is taking the lead in a Korea-U.S. shipbuilding collaboration project called "MASGA (Make American Shipbuilding Great Again)" using the Philly Shipyard, which it acquired for 100 million dollars, as a foothold. The company is working to secure a license to build warships and aims to construct the U.S. Navy's main combat vessels, including future nuclear-powered submarines.

It is also viewed as a positive development for Hanwha that U.S. President Donald Trump has recently allowed foreign shipbuilders investing in the U.S. to build up to two Navy vessels in their home countries.

Additionally, Hanwha Group is pursuing a 100% acquisition of Austal USA, which manufactures U.S. Navy vessels and nuclear-powered submarine modules. Hanwha Defense USA has reportedly valued the company at around 1.05 to 1.2 billion dollars (approximately 1.5 trillion to 1.7 trillion KRW).

Hanwha Defense USA is also considering establishing a new plant in Arkansas to supply ammunition and propellants to the U.S. military.

In a recent report, Samsung Securities stated, "Although the pace of final contract signings among domestic defense companies this year appears generally sluggish, Hanwha Aerospace stands out as the only major defense company to secure multiple export contracts in quick succession."

This content was produced with the assistance of AI translation services.