Gildan Activewear Inc. and HanesBrands Inc. announce that they have entered into a definitive merger agreement under which Gildan will acquire HanesBrands. This transaction implies an equity value of approximately $2.2 billion and an enterprise value2 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,” said Glenn Chamandy, president and CEO of Gildan in a press statement from the companies. “We are extremely pleased to welcome the HanesBrands’ team to the Gildan family. 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,” said Steve Bratspies, CEO of HanesBrands, in the press release. “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.

“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 in the press release. “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.”

Compelling Strategic and Financial Rationale

The press release notes that combining complementary strengths creates a global basic apparel leader with proven operational expertise to drive significant value creation:

  • 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.
  • 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 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 approximately $50 million to be realized in 2026, approximately $100 million in 2027, and approximately $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 12 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 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, North Carolina. 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 $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, 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% 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 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 EBITDA1. 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 EBITDA1. 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 (the “Q2 2025 Earnings 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% range;
  • Capex as a percentage of sales of about 3-4% 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 EBITDA1;
  • Adjusted diluted EPS1 CAGR in the low 20% range, starting from the midpoint of Gildan’s 2025 adjusted diluted EPS1 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 ratio1.

Furthermore, these assumptions are as of August 13, 2025 and are subject to significant risks and business uncertainties, including those factors described under the heading “Forward-looking statements and information” in this press release and in the Q2 2025 Earnings Release as well as the factors described in the “Risks and uncertainties” sections of Gildan’s annual management discussion and analysis (MD&A) for the year ended December 29, 2024 and the interim MD&A for the quarter ended June 29, 2025.

Forward-Looking Statements and Information

Certain statements included in this press release constitute “forward-looking statements” and forward-looking information within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 and Canadian securities legislation and regulations (collectively, “FLI”).

FLI is included in this press release to provide Gildan and HanesBrands shareholders and potential investors with information about Gildan and HanesBrands, including each company’s management’s respective assessment of Gildan’s and HanesBrands’ future plans and operations, which FLI may not be appropriate for other purposes and are subject to important risks, uncertainties, and assumptions. FLI generally can be identified by the use of conditional or forward-looking terminology such as “may,” “will,” “expect,” “intend,” “estimate,” “project,” “assume,” “anticipate,” “plan,” “foresee,” “believe,” “pro forma,” “outlook,” or “continue,” or the negatives of these terms or variations of them or similar terminology.

These forward-looking statements include, among others, statements regarding the expected closing of the transaction and the timing thereof; the anticipated benefits of the transaction including the expected run-rate synergies and the timing to realize such synergies; competitive position, market penetration, consumer reach, product offering, innovation and go-to-market capabilities of the combined business; operational plans for the combined business; Gildan’s three-year outlook (2026-2028) reflecting the impact and assuming completion of the proposed transaction, including in respect of net sales, capital expenditures, adjusted diluted EPS1 and net debt leverage ratio for such period; Gildan’s financial position (including its net debt leverage ratio1) following closing of the acquisition; Gildan’s expectations in respect of its credit ratings, including that it expects to obtain investment grade ratings in connection with the transaction; the efficiencies to be achieved as a result of the transaction; future return of capital to shareholders, including as it relates to dividends and share buybacks; the expected sources of financing of the transaction and the consummation of the financing contemplated by the debt commitment letter and any permanent financing to replace all or a portion thereof; the refinancing of HanesBrands’ existing debt; and the planned post-closing strategic alternatives review by Gildan in respect of the HanesBrands Australia business.

Any statements contained in this press release that are not statements of historical fact, including statements about Gildan’s beliefs and expectations, are forward-looking statements and should be evaluated as such. The combined and pro forma financial information included in this press release does not reflect what the actual financial and operational results would necessarily have been had Gildan and HanesBrands operated as a single combined company for the periods presented, and such information does not purport to project the combined company’s financial results or results of operations for any future period. See “Presentation of financial information” below.

We refer you to public filings made by Gildan and HanesBrands with the SEC and, in the case of Gildan, with the applicable Canadian securities regulatory authorities, for a discussion of the various factors that may affect Gildan’s, HanesBrands’ and/or the combined business’ future results. Material factors and assumptions that were applied in drawing a conclusion or making a forecast or projection are also set out throughout such documents and this press release.

FLI is inherently uncertain, and the results or events expressed or implied in such FLI may differ materially from actual results or events.

Material factors, which could cause actual results or events to differ materially from a conclusion, forecast, or projection in such FLI, include, but are not limited to, those discussed and identified in public filings made by Gildan and HanesBrands with the SEC and, in the case of Gildan, with the applicable Canadian securities regulatory authorities and the following: the timing and completion of the transaction, including the timely receipt of any necessary regulatory, shareholder and stock exchange approvals to satisfy the closing conditions of the transaction; the realization of anticipated benefits and synergies of the transaction and the timing and quantum thereof; the success of integration plans and the time required to successfully integrate the combined business; the focus of management time and attention on the transaction and other potential disruptions arising from the transaction; potential undisclosed liabilities not identified during the due diligence process; the accuracy of the combined and pro forma financial information of the combined business; and the ability of Gildan to obtain the financing contemplated by the debt commitment letter or permanent financing to replace all or a portion of such financing. In addition, the following risks apply to Gildan and are expected to apply to the combined business following closing of the transaction; changes in general economic, financial or geopolitical conditions globally or in one or more of the markets Gildan serves; Gildan’s ability to implement its growth strategies and plans, including its ability to bring projected capacity expansion online; the intensity of competitive activity and Gildan’s ability to compete effectively; Gildan’s reliance on a small number of significant customers, including our largest distributor; the fact that our customers do not commit to minimum quantity purchases; Gildan’s ability to anticipate, identify, or react to changes in consumer preferences and trends; Gildan’s ability to manage production and inventory levels effectively in relation to changes in customer demand; fluctuations and volatility in the prices of raw materials and energy-related inputs, from current levels, used to manufacture and transport our products; Gildan’s reliance on key suppliers and Gildan’s ability to maintain an uninterrupted supply of raw materials, intermediate materials, and finished goods; the impact of climate, political, social, and economic risks, natural disasters, epidemics, pandemics and endemics, in the countries in which Gildan operates or sell to, or from which Gildan sources production; disruption to manufacturing and distribution activities due to such factors as operational issues, disruptions in transportation logistic functions, labor disruptions, political or social instability, weather-related events, natural disasters, epidemics and pandemics, and other unforeseen adverse events; compliance with applicable trade, competition, taxation, environmental, health and safety, product liability, employment, patent and trademark, corporate and securities, licensing and permits, data privacy, bankruptcy, anti-corruption, and other laws and regulations in the jurisdictions in which Gildan operates; the imposition of trade remedies, compliance with or changes to duties and tariffs, international trade legislation, bilateral and multilateral trade agreements and trade preference programs that Gildan is currently relying on in conducting its manufacturing operations or the application of safeguards thereunder; the impact, including broader economic impacts, of the tariffs imposed by the U.S. Administration through a series of Executive Orders, and of any retaliation measures adopted by other governments, or the imposition of further restrictions or prohibitions on the export or import of goods between countries; elimination of government subsidies and credits that we currently benefit from, and the non-realization of anticipated new subsidies and credits; factors or circumstances that could increase Gildan’s effective income tax rate, including the outcome of any tax audits or changes to applicable tax laws or treaties; changes to and failure to comply with consumer product safety laws and regulations; changes in Gildan’s relationship with its employees or changes to domestic and foreign employment laws and regulations; Gildan’s reliance on key management and its ability to attract and/or retain key personnel; negative publicity as a result of actual, alleged, or perceived violations of human rights, labor and environmental laws or international labor standards, or unethical labor or other business practices by Gildan or one of its third-party contractors; Gildan’s ability to protect our intellectual property rights; operational problems with our information systems or those of Gildan’s service providers as a result of system failures, viruses, security and cybersecurity breaches, disasters, and disruptions due to system upgrades or the integration of systems; an actual or perceived breach of data security; rapid developments in artificial intelligence; changes in accounting policies and estimates; and exposure to risks arising from financial instruments, including credit risk on trade accounts receivables and other financial instruments, liquidity risk, foreign currency risk, and interest rate risk, as well as risks arising from commodity prices.

These factors may cause Gildan’s and/or HanesBrands’, as applicable, actual performance and financial results in future periods to differ materially from any estimates or projections of future performance or results expressed or implied by such FLI.

There can be no assurance that the expectations represented by our FLI will prove to be correct. The purpose of the FLI is to provide the reader with a description of Gildan’s or HanesBrands’ management’s expectations regarding Gildan’s or HanesBrands’ future financial performance, as applicable, and may not be appropriate for other purposes. Furthermore, unless otherwise stated, the FLI contained in this press release are made as of August 13, 2025, and we do not undertake any obligation to update publicly or to revise any of the included FLI, whether as a result of new information, future events, or otherwise unless required by applicable legislation or regulation. The FLI contained in this press release are expressly qualified by this cautionary statement.

The preceding press release was provided by a company unaffiliated with Apparelist. The views expressed within do not directly reflect the thoughts or opinions of the staff of Apparelist.