Basic is getting bigger.
In a major move to consolidate the basic side of the apparel industry, Gildan Activewear Inc. has agreed to buy HanesBrands Inc. in a cash and stock deal that values the innerwear giant stock at $2.2 billion.
Including debt, the transaction gives HanesBrands an enterprise value of $4.4 billion, or 8.9 times the company’s adjusted earnings before interest, taxes, depreciation and amortization for the last year.
The deal would be “immediately accretive” to Gildan’s adjusted earnings and produce $200 million in annual cost synergies within three years of the closing.
HanesBrands stockholders will receive 0.102 shares of Gildan and 80 cents cash for each share they own, a premium of about 24 percent based on the company’s closing price of $6 on Monday. Following completion of the deal, HanesBrands investors will own about 19.9 percent of the combined company.
The deal marks closes a chapter for HanesBrands, which has been in flux for some time, recently selling the struggling Champion business to brand licensing giant Authentic Brands Group. And the business could trim down some more as Gildan plans to consider a sale of HanesBrands Australia once the transaction is completed later this year or in early 2026.
While many fashion dealmakers thought the M&A market would slow given the uncertainty around tariffs in President Donald Trump’s trade war, it seems to have had the opposite effect for some players, who are looking to position for the future.
Glenn J. Chamandy, president and chief executive officer of Gildan, described the coming together as “a historic moment in Gildan’s journey” in a statement.
“With this transaction, our revenues will double and we achieve a scale that distinctly sets us apart,” Chamandy said. “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.”
Michael Kneeland, chair of Gildan, added: “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.”
Gildan’s headquarters will remain in Montréal, but the company will continue to maintain a strong presence in HanesBrands’ hometown of Winston-Salem, N.C.