Canadian activewear manufacturer Gildan is acquiring US underwear group HanesBrands in a deal valued at approximately $4.4 billion, with the share transfer already underway. The merger aims to combine the strengths of both companies to create a global leader in basic apparel, delivering significant synergies and expanding worldwide reach.
With the unanimous approval of both boards of directors, Gildan Activewear and Hanesbrands have entered into a definitive agreement to merge, with Gildan acquiring HanesBrands at an equity value of about $2.2 billion and an enterprise value of about $4.4 billion. The parties are defining enterprise value as fully diluted equity value, plus financial debt, plus underfunded pension liabilities, less cash and equivalents.
Terms and shareholder premium
The agreement is subject to shareholder and other approvals. Under the proposed terms, HanesBrands shareholders would receive 0.102 common shares of Gildan and $0.80 in cash for each share of HanesBrands common stock. This amounts to a premium of 24 percent on the stock’s closing price of Aug. 11.
Should the deal close – presumably in late 2025 or early 2026 – HanesBrands shareholders would own about 19.9 percent of Gildan shares on a non-diluted basis, and the total consideration would represent an acquisition multiple of about 8.9x. The implied transaction consideration is about 87 percent stock and 13 percent cash for every HanesBrands share.
The cash portion of the acquisition – about 13 percent of the total – should amount to about $290 million.
Merger rationale
According to Gildan, the merger will establish “a global basic apparel leader” – combining Gildan’s business in activewear with HanesBrands’ business in innerwear – and consolidate Gildan as “one of the largest global apparel players by number of units sold.”
According to its President and CEO, Glenn J. Chamandy, Gildan will be doubling its revenues and achieving “a scale that distinctly sets us apart,” and using its “low-cost vertically integrated platform” to “enhance efficiencies and drive additional innovation.”
Gildan expects, within three years, to see $200 million in annual run-rate cost synergies across supply chain, operations and SG&A. This breaks down to about $50 million realized in 2026, $100 million in 2027 and $50 million in 2028.
With these synergies, says Gildan, the combined entity’s pro forma adjusted Ebitda would have been about $1.6 billion for the 12 months ended on June 29.
HQs and operational plans
Gildan will be retaining its headquarters in Montreal and HanesBrands its (recently acquired) headquarters in Winston-Salem, North Carolina, where the combined company will have “a strong presence.” For HanesBrands Australia, however, Gildan will be considering “alternatives,” among them the company’s sale. It will otherwise be refinancing HanesBrands’ debt.
HanesBrands sold Champion to Authentic Brands Group in July of last year, with plans to pay down about $1 billion in debt.
FY25 guidance and three-year outlook
Gildan is reaffirming the full-year 2025 revenue and EPS guidance of its earnings release for Q2 2025, published on July 31. For 2026 to 2028, it is forecasting net sales growth at a compound annual growth rate of 3 to 5 percent and Capex as a percentage of sales of about 3 to 4 percent per year. For the same period, it expects HanesBrands to post annual net sales growth in the low single digits.
