Gildan Activewear and HanesBrands have agreed to merge, with Gildan acquiring HanesBrands. This deal values HaneBrands at approximately $2.2 billion in equity and $4.4 billion in total, based on Gildan’s stock price as of August 11, 2025.
Key Benefits of the Merger:
- Larger Company and Stronger Market Position: This merger will create one of the largest apparel companies globally, boosting Gildan’s position in basic apparel. This combined strength will enhance product innovation and improve customer support.
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Better Sales Strategy: Gildan excels in activewear, while HanesBrands leads in innerwear retail. Together, they can improve sales across all channels, promoting Gildan’s brands and strengthening the “Hanes” brand in activewear.
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Broader Product Range and Stability: This merger will create a more balanced product mix. Adding HanesBrands’ well-known innerwear brands will diversify Gildan’s offerings and appeal to a broader consumer base, helping the company withstand seasonal and market fluctuations.
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Cost-Effective Manufacturing: The new global supply chain will improve Gildan’s manufacturing efficiency. By leveraging Gildan’s robust manufacturing capabilities, the company will optimize its production, distribution, and logistics.
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Cost Savings: Gildan expects to save at least $200 million per year through better management of supply chain, operations, and administrative costs within three years. The savings forecast is $50 million for 2026, $100 million for 2027, and $50 million for 2028. With these savings, the estimated adjusted EBITDA for the combined business is expected to be around $1.6 billion for the 12 months ending June 29, 2025.
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Positive Financial Impact: The merger is expected to increase adjusted earnings per share (EPS) right away and to raise adjusted EPS by over 20% when including the expected savings.
Following the merger, Gildan will retain its headquarters in Montréal, Québec, and maintain a substantial presence in Winston-Salem, North Carolina. Gildan will also explore options for HanesBrands Australia, which may include selling the business or other strategic actions.
Gildan and HanesBrands have agreed to merge. Both companies’ Boards of Directors have approved the agreement. HanesBrands shareholders will get 0.102 shares of Gildan and $0.80 in cash for each share they own. The HanesBrands Board recommends that shareholders vote in favor of this merger.
Based on the stock’s closing prices on August 11, 2025, this offer values each HanesBrands share at $6, representing a 24% premium over the last closing price. Following the merger, HanesBrands shareholders will own approximately 19.9% of Gildan, enabling them to benefit from the combined companies’ growth.
The total purchase price translates to approximately 8.9 times HanesBrands’ adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) over the last twelve months, or 6.3 times if considering expected savings of $200 million. This merger must receive approval from HanesBrands shareholders and meet other standard conditions, including regulatory approvals, and ensure that Gildan shares are accepted for listing on the New York Stock Exchange and the Toronto Stock Exchange. The merger is expected to be completed in late 2025 or early 2026.
The merger deal will be about 87% in stock and 13% in cash. The cash part will amount to approximately $290 million. Gildan plans to refinance HanesBrands’ existing debt, which totals roughly $2 billion.
To support the merger, Gildan has arranged for $2.3 billion in financing. This includes a $1.2 billion bridge loan and additional term loans totaling $1.1 billion. The bridge loan will help cover new debt securities that will be issued before the deal closing.
After closing, Gildan expects its net debt to be around 2.6 times its adjusted EBITDA. Gildan plans to pause share buybacks until its debt ratio returns to a target level of 1.5 to 2.5 times net debt compared to adjusted EBITDA. Within 12 to 18 months after closing, Gildan aims to reduce its debt ratio to 2.0 times or less. Gildan also hopes to secure investment-grade ratings from S&P, Moody’s, and Fitch and will focus on maintaining a strong investment-grade profile in the future.
2025 Guidance and Future Outlook
Gildan is confirming its revenue and earnings per share (EPS) guidance for 2025 as stated in its second-quarter 2025 earnings release from July 31, 2025. After the merger, Gildan is also providing a three-year outlook for 2026-2028:
- Expect net sales growth of 3-5% each year.
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Anticipate capital expenditures to be about 3-4% of sales each year to support growth.
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Plan to enhance shareholder returns through dividends and share buybacks, aiming for a debt level of 1.5 to 2.5 times net debt to adjusted EBITDA.
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Predict an adjusted diluted EPS growth rate in the low 20% range, starting from the midpoint of its 2025 guidance.
This outlook is based on several factors, including expected low single-digit sales growth for HanesBrands, the anticipated closing of the merger by the end of March 2026, the successful integration of the businesses, and the realization of planned savings. Gildan also expects to refinance HanesBrands’ debt on favorable terms and to resume share buybacks when it returns to its target debt level.
Advisors: Morgan Stanley and CIBC Capital Markets acted as financial advisors to Gildan. Morgan Stanley Senior Funding and Canadian Imperial Bank of Commerce provided fully committed financing. Sullivan & Cromwell and Stikeman Elliott are serving as Gildan’s legal advisors. Goldman Sachs acted as lead financial advisor to Hanesbrands. Evercore also acted as a financial advisor to Hanesbrands, and Jones Day and Blake, Cassels & Graydon are serving as HanesBrands’ legal advisors.
KEY QUOTES:
“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. 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.”
Glenn J. Chamandy, President and Chief Executive Officer of Gildan
“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. 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.”
Steve Bratspies, CEO of HanesBrands
“This transaction represents a pivotal moment in Gildan’s story. 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.”
Michael Kneeland, Chair of the Board of Directors of Gildan
“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 honor and build on its long history for the benefit of all our stakeholders.”
Bill Simon, Chairman of HanesBrands’ Board of Directors
