Hanesbrands Merges with Gildan in $2.2 Billion Deal, Share Price Surges 32.8%

Hanesbrands (HBI) surged 32.8% after confirming a $2.2 billion merger with Gildan Activewear. Shareholders will receive 0.102 Gildan shares and $0.80 in cash for each HBI share. The transaction is subject to shareholder and regulatory approvals, expected to close in late 2025 or early 2026. In Q2, the company reported a net income of $81.6 million, up from a $298 million net loss last year, with net sales increasing 1.8% to $991 million.

HanesBrands (HBI) shares surged 32.8% following the confirmation of a $2.2 billion merger with Gildan Activewear. The deal will see Gildan acquire HanesBrands, creating a global leader in basic apparel. Shareholders of HanesBrands will receive 0.102 Gildan shares and $0.80 in cash for each HBI share, representing a premium of approximately 24% to HanesBrands' closing price on August 11, 2025 [1].

The merger agreement, approved unanimously by both companies' boards, implies an enterprise value of approximately $4.4 billion for HanesBrands. The transaction is expected to close in late 2025 or early 2026, subject to shareholder and regulatory approvals. Gildan's headquarters will remain in Montreal, Quebec, while HanesBrands will maintain a strong presence in Winston-Salem, North Carolina [1].

The acquisition aims to create a vertically integrated manufacturing network, leveraging Gildan's operational expertise to drive cost synergies. Gildan expects to realize at least $200 million in annual run-rate cost synergies within three years, with ~$50 million in 2026, ~$100 million in 2027, and ~$50 million in 2028. The combination is expected to be immediately accretive to Gildan's adjusted diluted EPS, with a 20%+ accretive pro forma for expected run-rate synergies of $200 million [1].

In the second quarter of 2025, HanesBrands reported a net income of $81.6 million, up from a $298 million net loss last year, with net sales increasing 1.8% to $991 million. The acquisition will further bolster HanesBrands' product offering and diversification, enhancing its resilience to seasonal and cyclical variations [1].

Gildan expects to refinance HanesBrands' debt, totaling approximately $2 billion, and has obtained $2.3 billion in committed transaction financing. The combined company aims to maintain an investment grade profile, with Gildan's net debt leverage ratio expected to be ~2.6x adjusted EBITDA at closing and ≤2.0x within 12 to 18 months post-closing [1].

References:
[1] https://ir.hanesbrands.com/news-releases/news-release-details/gildan-and-hanesbrands-agree-combine-create-global-basic-apparel