A sign is displayed during Gildan Activewear Inc.’s annual meeting in Montreal. (Photo: The Canadian Press/Christinne Muschi)
Gildan Steps Up as the Buyer
Gildan Activewear Inc., once rumored to be a takeover target, is now taking the lead with a bold move — acquiring HanesBrands Inc. for US$2.2 billion. The Montreal-based apparel giant announced Wednesday that the deal will merge Gildan’s efficient production capabilities with Hanes’ strong brand power, setting the stage for significant global growth.
“This is a landmark moment for Gildan,” said CEO Glenn Chamandy during an analyst call. “We’re creating a global leader in basic apparel, combining iconic underwear brands with our low-cost, vertically integrated manufacturing model.”
From Target to Power Player
This acquisition comes just 18 months after Gildan endured a turbulent leadership battle. Chamandy was ousted, only to return in May 2024 following the resignation of the former CEO and board. His comeback fueled a stock rally, which has now been boosted further by this announcement.
Gildan’s shares jumped more than 10% on the Toronto Stock Exchange Wednesday, despite news that the company would suspend its share buyback program until its debt levels improve.
Big Savings and Bigger Ambitions
The merger is expected to save at least US$200 million through operational efficiencies. Gildan also plans to use its manufacturing strength to help Hanes expand into the activewear market, an area where Hanes has been underrepresented.
“Hanes has unmatched brand recognition built over decades of heavy advertising,” Chamandy said. “Combining that with Gildan’s cost-efficient production opens new possibilities across the market.”
Deal Structure and Debt
The agreement offers HanesBrands shareholders 0.102 of a Gildan share plus 80 cents US in cash for each Hanes share. About 87% of the deal’s value comes from the stock component. In addition to the US$2.2 billion equity value, Gildan will assume roughly US$2 billion in Hanes’ debt.
The companies will also explore strategic options for HanesBrands’ Australia operations, including a possible sale.
Shareholder Impact
HanesBrands chair Bill Simon praised the agreement, saying it provides both immediate financial returns and long-term growth potential. Once completed, HanesBrands shareholders will own about 19.9% of Gildan’s shares on a non-diluted basis.
The deal, subject to shareholder approval and regulatory clearance, is expected to close in late 2025 or early 2026.
