South Korean conglomerate Hanwha Group has been cleared to increase its shareholding in Austal to 19.9%, a step that makes it the Australian defence shipbuilder’s largest owner and is expected to shape naval defence cooperation between South Korea, Australia and the United States.

Australia’s treasurer Jim Chalmers announced the approval on Thursday after the Foreign Investment Review Board completed its review. The decision came after the US government had already given its own clearance, reflecting Austal’s role building small surface warships and auxiliary vessels for the US Navy at its shipyard in Mobile, Alabama.

In March, Hanwha Group acquired an initial 9.9% interest in Austal through an off-market transaction, which triggered speculation that it could later seek to acquire the shipbuilder outright.

With the latest approval, the South Korean group can almost double its stake and move ahead of Tata Rang Ventures, which holds 19.28%. As a result, Hanwha Group becomes Austal’s largest shareholder.