Shares of Australian shipbuilder Austal Ltd surged 5.10% in intraday trading on Wednesday, following the announcement of a significant acquisition offer for its U.S. operations.

The stock price jump came after Austal disclosed that South Korean conglomerate Hanwha Group had offered to buy its U.S. operations for up to $1.20 billion. The move is part of Hanwha's strategy to expand its footprint in the American defence market, a sector that has seen increased interest and investment in recent years.

The proposed deal highlights the strategic value of Austal's U.S. shipbuilding assets, which have been a key component of the company's growth and its role in supplying naval vessels to the U.S. Navy.