Gildan Activewear has announced its agreement to acquire U.S.-based Hanesbrands for $2.2 billion in cash and stock. This strategic move aims to strengthen Gildan’s presence in the basic apparel market. The acquisition will see Gildan paying approximately $6 per Hanesbrands share, a 24% premium over the previous closing price, valuing the equity at $2.2 billion. Hanesbrands’ shares experienced a drop of 2.4% in premarket trading after a significant surge the previous day when the buyout news was initially reported.
The merger will combine Hanesbrands’ strong retail brand portfolio, which includes Hanes, Bonds, Maidenform, and Playtex, with Gildan’s robust wholesale operations across various regions, including North America, Latin America, Asia-Pacific, and Europe. Analysts at Citigroup have noted the potential for Gildan to enhance Hanesbrands’ efficiency through its expertise in low-cost manufacturing.
The acquisition marks the end of a challenging period for Hanesbrands, characterized by underinvestment, substantial debt, and mixed outcomes from various acquisitions since its separation from Sara Lee in 2006. Despite declining sales due to competition in the athleisure market and reduced demand, Hanesbrands has improved its margins through cost-cutting and supply-chain enhancements.
In its effort to refocus on core categories, Hanesbrands has divested several assets, including the sale of its sportswear brand Champion for $1.2 billion last year. Following the acquisition, Gildan plans to evaluate strategic options for Hanesbrands Australia, which may involve a sale or other transactions. The deal is anticipated to close by late 2025 or early 2026 and is expected to immediately enhance adjusted earnings per share.
