Gildan Activewear to Acquire HanesBrands in $2.2 Billion Merger

What's Happening?

Gildan Activewear Inc. and HanesBrands Inc. have announced a definitive merger agreement, where Gildan will acquire HanesBrands for approximately $2.2 billion. This merger aims to create a global leader in basic apparel, combining HanesBrands' iconic innerwear brands with Gildan's strong wholesale market presence. The transaction is expected to double Gildan's revenues and enhance its scale, positioning the company for significant growth. The merger will leverage Gildan's low-cost vertically integrated manufacturing network to achieve at least $200 million in annual cost synergies within three years.

Why It's Important?

The merger between Gildan and HanesBrands represents a significant consolidation in the apparel industry, potentially reshaping market dynamics. By combining resources, the companies aim to enhance operational efficiencies and expand their global reach. This strategic move could lead to increased competitiveness against other major apparel brands, benefiting consumers through potentially lower prices and improved product offerings. The merger also highlights the importance of scale and integration in achieving cost savings and driving innovation in the industry.

What's Next?

Following the merger, Gildan plans to maintain HanesBrands' presence in Winston-Salem and explore strategic alternatives for HanesBrands Australia, which may include a sale or other transaction. The merger is expected to close in late 2025 or early 2026, with immediate accretive effects on Gildan's adjusted profit per share. Stakeholders will be closely monitoring the integration process and the realization of projected synergies, which could influence future investment and expansion strategies.