MONTREAL — Gildan Activewear Inc.'s shares are up more than 10 per cent in early trading after it announced it was taking over HanesBrands Inc. for US$2.2 billion.
Montreal-based Gildan said the deal is a push for size that can help it grow in a competitive industry.
"Today is a historic moment in Gildan’s journey," said chief executive Glenn Chamandy in a statement.
"With this transaction, our revenues will double and we achieve a scale that distinctly sets us apart."
The combined company will leverage Hanes' retail presence with Gildan's activewear focus to expand the reach of both, said Chamandy.
Cost savings of US$200 million through synergies are expected over three years, the company said.
The cash-and-share deal includes Gildan issuing HanesBrands shareholders 0.102 of a Gildan share and 80 cents US in cash for each Hanes share with the share issuance making up 87 per cent of the value of the deal.
The terms put an equity value of US$2.2 billion on HanesBrands, while Gildan will also take on about US$2 billion in HanesBrands debt.
Gildan's shares trended down when news of the deal first broke Tuesday, but shares were up $8.30, or 12.2 per cent at $75.93 on the Toronto Stock Exchange as of Wednesday morning.
Shares climbed despite Gildan also announcing it would suspend its share buyback program until its debt-to-earnings ratio improves.
HanesBrands chair Bill Simon said the deal delivers significant and certain value for the company's shareholders, both through immediate cash and upside potential of the combined company.
"As part of Gildan, HanesBrands will benefit from an even stronger financial and operational foundation that will provide new growth opportunities – helping to power further innovation, a broader product offering and greater reach across channels and geographies," Simon said in a statement.
"We are confident that this transaction and the next chapter with Gildan is the right next step for HanesBrands."
The transaction is subject to HanesBrands shareholder approval and other customary closing conditions. It is expected to close in late 2025 or early 2026.
HanesBrands shareholders will own about 19.9 per cent of Gildan shares on a non-diluted basis once the deal is complete.
The deal would including looking at a potential sale or other strategic alternatives for HanesBrands Australia.
This report by The Canadian Press was first published Aug. 13, 2025.
Companies in this story: (TSX:GIL)
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