South Korean defense contractor Hanwha Systems and its affiliate Hanwha Ocean have agreed to acquire Philly Shipyard in Philadelphia, Pennsylvania, for $100 million. This announcement comes four months after US Navy Secretary Carlos Del Toro toured Asian shipyards to encourage investment in American facilities.
The deal marks the first instance of a South Korean shipbuilder investing in a US shipyard, a move that Del Toro hailed as a “game-changing milestone” for the American shipbuilding sector. The acquisition is expected to bring sophisticated shipbuilding expertise to the US, potentially enhancing the country’s naval capabilities in the face of growing competition from China.
Philly Shipyard, located on the site of the former Philadelphia Naval Shipyard, has a rich history dating back to 1801. At its peak during World War II, it employed 40,000 people and constructed numerous warships. However, the shipyard faced closure in 1996 following the end of the Cold War and reduced demand.
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The transaction, slated to close in the fourth quarter of 2024, is subject to approval by the Committee of Foreign Investments in the US (CFIUS), which will assess any potential national security implications.
This investment aligns with the US Navy’s efforts to rebuild America’s shipbuilding capacity and integrate expertise from allies. It also reflects the impressions gained during Del Toro’s visit to South Korean shipyards, where he noted superior digitization and monitoring capabilities compared to American facilities.
The deal is expected to benefit Philly Shipyard by introducing new technologies and best practices, potentially addressing challenges such as labor shortages faced by US shipyards. As the first of its kind, this acquisition may pave the way for further international investments in American shipbuilding, strengthening the country’s maritime capabilities.
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