Montreal-based Gildan Activewear Inc. has signed a deal to buy HanesBrands Inc. for $2.2 billion in shares and cash.

On Monday, August 11, the Financial Times reported Gildan Activewear was nearing a deal to acquire Hanesbrands in a deal valuing the U.S. innerwear-maker at about $5 billion, including debt.

The transaction implies an equity value of approximately $2.2 billion and an enterprise value of approximately $4.4 billion for HanesBrands, based on the closing price of Gildan common stock on August 11, 2025.

“Today is a historic moment in Gildan’s journey as we look to join forces with HanesBrands. We are extremely pleased to welcome the HanesBrands’ team to the Gildan family,” commented Glenn J. Chamandy, president and chief executive officer of Gildan. “With this transaction, our revenues will double and we achieve a scale that distinctly sets us apart. The combination with HanesBrands strengthens our positioning with an opportunity to expand the heritage “Hanes” brand presence in activewear across channels, while enhancing Gildan’s retail reach for its portfolio of brands. Further, our state of the art low-cost vertically integrated platform will be utilized to enhance efficiencies and drive additional innovation. We are excited for the next stage of growth and remain focused on supporting our customers and continuing to drive long term shareholder value.”

“This transaction represents a powerful alignment of HanesBrands’ and Gildan’s shared commitment to quality, innovation, and excellence. We have great respect for Gildan’s manufacturing strength and long track record of success. We look forward to expanding upon HanesBrands’ portfolio of leading innerwear brands and go-to-market expertise and opening new doors for growth and impact as part of Gildan,” said Steve Bratspies, CEO of HanesBrands. “I want to extend my deepest gratitude to our associates around the world. Your dedication, hard work, and resilience have built HanesBrands into an iconic and trusted name. Today marks the beginning of an exciting journey ahead as part of Gildan and I’m particularly pleased that Gildan intends to maintain HanesBrands’ strong presence in Winston-Salem.”

“This transaction represents a pivotal moment in Gildan’s story,” said Michael Kneeland, chair of the Board of Directors of Gildan. “Hanes is a distinguished brand with a proud legacy, and by joining forces with HanesBrands, we are forging an exceptional organization built on the strengths of both companies. Leveraging best practices and the exceptional teams from each side, we are poised to deliver outstanding value to our customers and shareholders. With the finest talent in the industry, we have an extraordinary opportunity ahead to shape the future together.”

HanesBrands, with sales of $3.51 billion in 2024, manufactures apparel basics, including men’s, women’s, and kids’ underwear and socks, as well as intimate apparel (bras and shapewear), T-shirts, fleece, sports bras, and thermals. Brands include Hanes, Bonds, Bali, Maidenform, Playtex, Bras N Things, Berlei, Wonderbra, Zorba, JMS/Just My Size, and Comfortwash. The company also makes Polo Ralph Lauren underwear under a license.

Gildan, with sales of $3.27 billion in 2024, manufactures activewear, underwear, and socks, sold to a broad range of customers, including wholesale distributors, screen printers and embellishers, as well as retailers. Its brands include Gildan, American Apparel, Comfort Colors, Goldtoe, and Peds. It sells Champion to the printwear channel as part of a license.

Merger Rationale
Gildan listed six factors supporting the strategic and financial rationale for the merger, as follows::

  • Expanded scale and strengthened positioning. The scale and capabilities of the combined company further enhance Gildan’s position in basic apparel as one of the largest global apparel players by number of units sold, with strong innovation from yarn spinning to end product, and greater supply chain capabilities to support customers.
  • Strengthened and complementary go-to-market capabilities. The two businesses are ideally matched to unlock value, bringing together Gildan’s leadership in activewear with HanesBrands’ leading innerwear retail presence and expertise. The combination will enhance go-to-market capabilities and continued growth in all channels, by accelerating Gildan’s retail penetration with its portfolio of brands while supporting the iconic “Hanes” brand growth in activewear in the retail channel.
  • Enhanced product diversification and resiliency. The combination will result in meaningfully balanced category and channel exposure. The addition of HanesBrands’ iconic innerwear brands enhances Gildan’s product offering and diversification, broadening its consumer reach while further reinforcing its resilience to seasonal and cyclical variations.
  • Low-cost vertically integrated manufacturing network. The combined global supply chain is expected to enhance Gildan’s low-cost advantage, along with the opportunity for value creation by driving manufacturing synergies. Gildan will utilize its best-in-class low-cost manufacturing structure and operational expertise, efficiently reallocate production volumes across geographies, and optimize its network, distribution and logistics infrastructure, leaning on its proven operational capabilities.
  • Significant synergy opportunity. Gildan has identified at least $200 million in expected annual run-rate cost synergies across supply chain, operations and SG&A that it expects to realize within three years, with ~$50 million to be realized in 2026, ~$100 million in 2027 and ~$50 million in 2028. Inclusive of these synergies, the pro forma adjusted EBITDA1 of the combined business would have been approximately $1.6 billion for the trailing twelve months ended June 29, 2025.
  • Highly accretive financial profile. The transaction is expected to be immediately accretive to adjusted diluted EPS1 and 20 percent+ accretive to adjusted diluted EPS1 pro forma for expected annual run rate synergies of $200 million.

Following the transaction close, Gildan’s headquarters will continue to be located in Montréal, Québec and the combined company will maintain a strong presence in Winston-Salem, NC. In addition, Gildan intends to initiate a review of strategic alternatives for HanesBrands Australia, which could include a sale or other transaction.

Transaction Terms

  • Under the terms of the merger agreement, which has been unanimously approved by the Boards of Directors of Gildan and HanesBrands, HanesBrands shareholders will receive 0.102 common shares of Gildan and 80 cents in cash for each share of HanesBrands common stock. The Board of Directors of HanesBrands recommends that the HanesBrands shareholders vote in favor of the proposed transaction.
  • Based on the closing price of Gildan and HanesBrands’ common stock on August 11, 2025, the offer implies a value of $6.00 per HanesBrands share, representing a premium of approximately 24 percent to HanesBrands’ closing price on such date.
  • Upon closing, HanesBrands shareholders will own 19.9 percent of Gildan shares on a non-diluted basis, providing HanesBrands shareholders the ability to participate in the combined entity’s expected growth opportunities and synergies.
  • The total consideration represents an acquisition multiple2 of approximately 8.9x HanesBrands’ LTM adjusted EBITDA1 or 6.3x including expected run-rate synergies of $200 million.
  • The transaction is subject to HanesBrands shareholder approval and other customary closing conditions, including regulatory approvals, and the Gildan common shares to be issued pursuant to the merger agreement being approved for listing on the New York Stock Exchange and the Toronto Stock Exchange.
  • The transaction is expected to close in late 2025 or early 2026.

 Transaction Financing 

  • The implied transaction consideration is approximately 87 percent stock and 13 percent cash for every HanesBrands share.
  • The cash portion of the acquisition is anticipated to be approximately $290 million. Gildan expects to refinance HanesBrands’ revolving credit facility, term loans, unsecured notes, and short-term debt totaling approximately $2 billion in aggregate.
  • In connection with the acquisition, Gildan has obtained $2.3 billion of committed transaction financing, comprised of a $1.2 billion bridge facility and term loans in the aggregate amount of $1.1 billion. The bridge
  • facility provides financing to backstop an anticipated issuance of new debt securities prior to closing of the acquisition.
  • At closing, Gildan’s net debt leverage ratio1 is expected to be ~2.6x adjusted EBITDA. Gildan intends to pause share repurchases until its net debt leverage ratio1 approximates the midpoint of its target leverage framework of 1.5-2.5x net debt1 to adjusted EBITDA. Gildan’s net debt leverage ratio1 is expected to be ≤2.0x within 12 to 18 months post-closing.
  • Finally, Gildan expects to obtain investment grade ratings from S&P, Moody’s and Fitch and remains committed to maintaining an investment grade profile in the future.

2025 Guidance and Three-Year Outlook
Gildan is reaffirming its full year 2025 revenue and EPS guidance as detailed in its 2025 second quarter earnings press release published on July 31, 2025. Furthermore, reflecting the impact and assuming completion of the proposed transaction, Gildan is providing a three-year outlook for the 2026-2028 period:

  • Net sales growth at a compound annual growth rate in the 3-5 percent range;
  • Capex as a percentage of sales of about 3-4 percent per year, on average, to support long-term growth and vertical integration;
  • Enhanced shareholder returns through dividends and share repurchases in line with a long-term target leverage framework of 1.5x to 2.5x net debt1 to adjusted EBITDA
  • Adjusted diluted EPS1 CAGR in the low 20 percent range, starting from the midpoint of Gildan’s 2025 adjusted diluted EPS guidance.

The three-year outlook for the 2026-2028 period is based on, among other things, the assumptions underlying Gildan’s current three-year outlook (for the 2025-2027 period) as described in Gildan’s fiscal 2024 earnings press release dated February 19, 2025 and in the Q2 2025 earnings release, as well as the following additional assumptions: low single-digit annual net sales growth for HanesBrands during such period; the closing of the announced HanesBrands acquisition before the end of the first quarter of 2026; the successful integration of the acquired business into Gildan’s existing operations; the realization in full and within the projected timeframe of the expected run-rate synergies and other benefits anticipated from the acquisition; the refinancing of HanesBrands’ existing debt within the expected timeframe and on expected market terms; and the resumption of share buybacks under normal course issuer bid programs by Gildan upon return to the midpoint of Gildan’s targeted 1.5x to 2.5x pro forma net debt to adjusted EBITDA leverage ratio.

Advisors
Morgan Stanley & Co. LLC and CIBC Capital Markets acted as financial advisors to Gildan. Morgan Stanley Senior Funding, Inc. and Canadian Imperial Bank of Commerce provided fully committed financing. Sullivan & Cromwell LLP and Stikeman Elliott LLP are serving as Gildan’s legal advisors. Goldman Sachs & Co. LLC acted as lead financial advisor to Hanesbrands. Evercore also acted as a financial advisor to Hanesbrands, and Jones Day and Blake, Cassels & Graydon LLP are serving as HanesBrands’ legal advisors.

Image courtesy HanesBrands