Gildan Activewear Inc. is reportedly close to securing an agreement to purchase Hanesbrands, a transaction that could value the U.S. underwear manufacturer at nearly $5 billion when factoring in debt. Sources suggest the negotiations are in the final stages, with an announcement possible by the end of the week — though there is no guarantee a deal will be finalised.
Hanesbrands has faced several years of financial pressure, with sluggish sales, reduced orders from retail partners, and higher costs linked to U.S. trade policies. The company’s share price has fallen by about 40% since the start of the year, and its debt stood at roughly $2.5 billion as of June. In 2024, Hanesbrands sold its Champion brand to Authentic Brands Group for $1.2 billion to reduce debt, leaving it with a portfolio that includes Hanes, Bonds, Maidenform, Bali, and Playtex.
In contrast, Montreal-based Gildan has enjoyed record sales and earnings, with its share price trading near historic highs. Known primarily for its blank T-shirts, fleece, socks, and underwear, Gildan’s enterprise value sits just under $10 billion. Historically, the company has expanded by strengthening its existing brands, with its largest acquisition to date being American Apparel in 2016 for $88 million after the retailer’s bankruptcy.
Both companies have dealt with activist investor pressure in recent years. Hanesbrands reached a settlement with Barington Capital in late 2023 that saw three independent directors join its board. Gildan faced a high-profile boardroom battle with Browning West LP in 2024, which resulted in the resignation of its entire board and the return of Glenn Chamandy as CEO.
Strategically, a successful acquisition would mark a significant shift for Gildan, which has traditionally preferred organic growth over buying rival brands. It could also give the company an expanded portfolio and stronger position in the global apparel market, particularly in the basics and underwear segment.
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