Newcastle shipbuilder, Forgacs, will sell its defence engineering division to Western Australian firm, Civmec.

Forgacs chairman, Peter Burgess, says the agreement will strengthen the Hunter’s engineering capability.

“This agreement will boost Newcastle’s role as a leading provider of engineering services to sectors that are vital to the future prosperity and safety of the nation”, he said.

“This proposed transaction represents very good news for the Newcastle and Hunter region as Civmec will be using the Tomago shipyard facility as its east coast headquarters and intends to replicate their Western Australian capabilities at Tomago”.

The details of the transaction are still being finalised, but the owners of Forgacs would end up with a stake in Civmec.

The sale is expected to be finalised next month.