Gildan Makes $2.2B Bid for HanesBrands

Gildan Activewear Inc. has transformed from a possible takeover candidate last year into the acquirer, announcing the purchase of HanesBrands Inc. for US$2.2 billion. Montreal-based Gildan said the transaction will combine a highly efficient manufacturing platform with widely recognized apparel brands, creating a stronger foundation for future growth and competitive advantage.

“Today is a historic moment in Gildan’s journey,” Gildan chief executive Glenn Chamandy said on an analyst call about the deal. “The combination will create a global basic apparel leader with access to iconic underwear brands and further strengthen our low-cost vertically integrated manufacturing network. And we’ll achieve a scale that distinctly sets us apart.”

Market rallies behind Gildan as CEO’s return and acquisition news drive gains

The announcement arrives roughly a year and a half after Gildan faced takeover interests amid a prolonged and contentious boardroom battle. That dispute culminated with Chamandy’s temporary removal and then his reinstatement in May 2024, after the prior CEO and board resigned. The market reacted positively when Chamandy returned, pushing shares higher. While concerns about tariffs and trade pressures had dampened gains earlier this year, Gildan shares rose sharply on the day of the acquisition news, climbing more than 10% in midday trading on the Toronto Stock Exchange.

Investors pushed the stock higher despite Gildan also declaring the suspension of its share buyback program until its debt-to-earnings ratio improves. The move to pause repurchases underscores the company’s focus on balance-sheet management as it integrates a major acquisition and assumes additional leverage.

Gildan targets US$200M in savings and activewear growth with Hanes integration

Gildan says the combined business will pursue at least US$200 million in cost savings by capturing efficiencies across manufacturing, procurement and distribution. The savings are expected to come from consolidating operations where appropriate, optimizing supply chains and leveraging the scale of a larger global footprint.

Beyond cost synergies, Gildan plans to use its vertically integrated, low-cost manufacturing capabilities to broaden Hanes’s product mix—particularly by expanding the Hanes brand into activewear categories where it currently has limited presence. Chamandy noted that Hanes brings decades of brand-building and roughly US$100 million a year in advertising investment, while Gildan has concentrated on production excellence. Combining Hanes’s strong consumer awareness with Gildan’s production scale and efficiency, he said, opens new opportunities across retail channels and product segments.

“You have an iconic brand like Hanes and you have a vertically integrated low-cost producer like Gildan, and now that opens up everything in the market for us from all aspects,” Chamandy said, emphasizing how the strategic fit should support both margin improvement and revenue growth over time.

Deal awaits shareholder approval, expected to close late 2025 or early 2026

The transaction is structured as a cash-and-share arrangement in which Gildan will issue HanesBrands shareholders 0.102 of a Gildan share plus US$0.80 in cash for each Hanes share. The share issuance accounts for approximately 87% of the transaction value, placing an equity value of US$2.2 billion on HanesBrands. In addition to that equity value, Gildan will assume approximately US$2 billion of HanesBrands’ debt as part of the deal.

As part of the planned post-close strategy, the companies will evaluate potential strategic alternatives for HanesBrands Australia, including the possibility of a sale. HanesBrands chair Bill Simon described the proposal as delivering “significant and certain value” for Hanes shareholders, combining immediate cash consideration with upside potential in the larger combined company. “As part of Gildan, HanesBrands will benefit from an even stronger financial and operational foundation that will provide new growth opportunities,” he said.

The agreement remains subject to HanesBrands shareholder approval and customary closing conditions. Management teams on both sides expect the transaction to close in late 2025 or early 2026, assuming regulatory approvals and shareholder support. After closing, HanesBrands shareholders are expected to own about 19.9% of Gildan on a non-diluted basis.

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