South Korean Conglomerate Hanwha Group on Tuesday reaffirmed its willingness to continue pushing for a takeover of Australian shipbuilder Austal despite the latter’s earlier announcement to reject the former’s offer due to low chances of obtaining regulatory approvals.

According to media reports and industry sources, the value of the acquisition offer has been estimated between 895 million and 1.02 billion Australian dollars ($581 million and $663 million).

Noting Austal’s position as a designer and builder of defense vessels for the Australian and US navies, the Australian shipbuilder said Hanwha’s proposal must obtain approvals from Australia’s Foreign Review Board, the Committee on Foreign Investment in the United States and the US Defense Counterintelligence and Security Agency.

“At present, Austal is not satisfied that these mandatory approvals would be secured, however, the company is open to further engagement if Hanwha can provide certainty on whether a transaction would be approved,” said Austal.

Hanwha, on the other hand, explained that it sees a high chance of a successful takeover, citing its recent businesses in the Australian defense sector including the K9 self-propelled howitzers and Redback infantry fighting vehicles, which Hanwha Aerospace has exported to Australia, and the amicable relationship between the Korean and Australian governments.

According to industry sources, the buyout discussions between Hanwha and Austal have been ongoing since the former initially proposed the takeover offer about six months ago.

“When Austal first raised the possibility of the Australian government disapproving the Korean company’s attempt to take over its defense company, (Hanwha) carried out due diligence through a global law firm and confirmed that there were no issues regarding Austal’s concern,” said one of the sources.

The source added that Austal agreed to the result of due diligence on obtaining regulatory approvals and proceeded to carry out business due diligence in March but abruptly canceled an on-site inspection a day before the planned schedule.

Hanwha’s positive outlook for the takeover completion has gained steam as the portion of Australian companies that ended up getting disapproval for a buyout attempt from a foreign entity is estimated at only 0.2 percent among some 4,000 takeovers over the last three years.

Hanwha said the Austal acquisition is expected to create synergy as Hanwha Ocean’s steel ship capabilities will open up chances to score battleship exports across the world if combined with the Australian shipbuilder’s existing businesses, particularly in the US defense sector. Austal’s shipyard in Alabama accounts for about 80 percent of the firm’s revenue.

The price of Austal listed on the Australian stock market jumped and closed at AU$2.43 per share at closing, up 10.45 percent from the previous trading day. As of Tuesday’s closing, Austal’s market capitalization stood at AU$881m.