Gildan and HanesBrands enter merger agreement

Gildan Activewear and HanesBrands have announced they have entered into a definitive merger agreement under which Gildan will acquire HanesBrands.

The announcement confirms 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,” says 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,” says 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,” says 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 organisation 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.”

Bill Simon, Chairman of HanesBrands’ Board of Directors, comments, “We are very pleased to have reached this agreement with Gildan, which delivers significant and certain value for our shareholders, both through immediate cash and substantial upside potential of the combined company. As part of Gildan, HanesBrands will benefit from an even stronger financial and operational foundation that will provide new growth opportunities – helping to power further innovation, a broader product offering and greater reach across channels and geographies. We are confident that this transaction and the next chapter with Gildan is the right next step for HanesBrands and will honour and build on its long history for the benefit of all our stakeholders.”

Both brands outline the strategic and financial rationale for the merger as combining complementary strengths to create a global basic apparel leader with proven operational expertise to drive significant value creation, adding:
•    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 merger will result in a more balanced category and channel exposure. Adding HanesBrands’ innerwear brands enhances Gildan’s product offering and diversification, broadening its consumer reach while reinforcing its resilience to seasonal and cyclical variations.
•    State-of-the-art 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 utilise its best-in-class low-cost manufacturing structure and operational expertise, efficiently reallocate production volumes across geographies, and optimise 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 intends to realise within three years, with ~$50 million to be realised 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%+ 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 merged company will maintain a strong presence in Winston-Salem, North Carolina. In addition, Gildan intends to initiate a review of strategic alternatives for HanesBrands Australia, which could include a sale or other transaction.

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 $0.80 in cash for each share of HanesBrands common stock. The Board of Directors of HanesBrands recommends that the HanesBrands shareholders vote in favour 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% to HanesBrands' closing price on such date.

Upon closing, HanesBrands shareholders will own ~19.9% of Gildan shares on a non-diluted basis, allowing them to participate in the combined entity’s expected growth opportunities and synergies.

The total consideration represents an acquisition multiple of approximately 8.9x HanesBrands’ LTM adjusted EBITDA 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. The Gildan common shares to be issued pursuant to the merger agreement have been 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.

The implied transaction consideration is approximately 87% stock and 13% 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 totalling 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 ratio is expected to be ~2.6x adjusted EBITDA¹. Gildan intends to pause share repurchases until its net debt leverage ratio approximates the midpoint of its target leverage framework of 1.5-2.5x net debt¹ to adjusted EBITDA. Gildan’s net debt leverage ratio is expected to be ≤2.0x within 12 to 18 months post-closing.

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.