Gildan Activewear to merge with HanesBrands for enterprise value of around 4.4 billion dollars

Gildan Activewear, Inc. (GIL, GIL.TO) and HanesBrands, Inc. (HBI) announced Wednesday that they have entered into a definitive merger agreement under which Gildan will acquire HanesBrands.

This transaction implies an equity value of approximately 2.2 billion dollars and an enterprise value of approximately 4.4 billion for HanesBrands, based on the closing price of Gildan common stock on August 11, 2025.

Following transaction close, Gildan's headquarters will continue to be located in Montreal, Quebec and the combined company will maintain a strong presence in Winston-Salem, North Carolina.

In addition, Gildan intends to initiate a review of strategic alternatives for HanesBrands Australia, which could include a sale or other transaction.

Under the terms of the merger agreement, which has been unanimously approved by the Boards of Directors of both companies, HanesBrands shareholders will receive 0.102 common shares of Gildan and 0.80 cents in cash for each share of HanesBrands common stock.

The Board of Directors of HanesBrands recommends that the HanesBrands shareholders vote in favour of the proposed transaction.

Based on the closing price of Gildan and HanesBrands' common stock on August 11, 2025, the offer implies a value of 6.00 dollars per HanesBrands share, representing a premium of approximately 24 percent to HanesBrands' closing price on such date.

Upon closing, HanesBrands shareholders will own about 19.9 percent of Gildan shares on a non-diluted basis, providing HanesBrands shareholders the ability to participate in the combined entity's expected growth opportunities and synergies.

The transaction is subject to HanesBrands shareholder approval and other customary closing conditions, including regulatory approvals, and the Gildan common shares to be issued pursuant to the merger agreement being approved for listing on the New York Stock Exchange and the Toronto Stock Exchange. The transaction is expected to close in late 2025 or early 2026.

The implied transaction consideration is approximately 87 perent stock and 13 percent cash for every HanesBrands share.

The cash portion of the acquisition is anticipated to be approximately 290 million dollars. Gildan expects to refinance HanesBrands' revolving credit facility, term loans, unsecured notes, and short-term debt totaling approximately 2 billion dollars in aggregate.

In connection with the acquisition, Gildan has obtained 2.3 billion dollars of committed transaction financing, comprised of a 1.2 billion bridge facility and term loans in the aggregate amount of 1.1 billion dollars.

The bridge facility provides financing to backstop an anticipated issuance of new debt securities prior to closing of the acquisition.

Gildan is reaffirming its full year 2025 revenue and earnings per share guidance.

Gildan is providing a three-year outlook for the 2026-2028 period, with net sales growth at a compound annual growth rate in the 3 to 5 percent range and adjusted earnings per share CAGR in the low 20 percent range, starting from the midpoint of Gildan's 2025 adjusted earnings per share guidance.(DPA)