Gildan is buying Hanesbrands. They are spinning it as a “merger” but Gildan is doing all the paying and Gildan is running the show, so…..

Here is the Gildan press release if you want to read it yourself. It is titled:

“Gildan and HanesBrands Agree to Combine To Create a Global Basic Apparel Leader”

In this Trump run government, clearly antitrust action is not a priority, and that’s clearly why this is happening at this point in history. “Combing to create a global basic apparel leader” is an understatement as this new company will overwhelmingly control the t-shirt (activewear)  market and the underwear market. Hanes shrinking portion of that market was probably not the target here, it was the underwear market where Hanes was still controlling large market share. You might think that with all the talk of bringing manufacturing back to the US that this might be a target of government regulation, but it is doubtful as Trump has repeatedly said that move doesn’t including t-shirts.

In plain English here is the skinny…

What is happening exactly?

Gildan is buying HanesBrands, the company behind Hanes, Maidenform, Bali, and Bonds. Both companies’ boards have already approved the deal and the financing is all in place. The only possible way this is now stopped is

What HanesBrands Shareholders Get:

• For every HanesBrands share, shareholders will receive $0.80 in cash plus 0.102 Gildan shares.
• Based on stock prices on August 11, 2025, that works out to about $6.00 per share, which is 24% more than HanesBrands’ price the day before.
• After the deal, HanesBrands shareholders will own about 20% of the combined company.

Why They Say They’re Doing It:

• World domination: Gildan is strong in activewear, Hanes is strong in underwear — together, they’ll rule the world in these markets
• More selling channels: They can sell to more stores, more online platforms, and more wholesale customers.
• Evening out the seasons: More product variety means sales won’t dip as much during slow seasons.
• Cheaper to run: Gildan has the lowest  manufacturing network that can also make Hanes products now.
• Savings: They expect to save about $200 million a year within 3 years by cutting overlapping costs and improving operations. Surely many employees will be looking over their shoulders in the coming months.
• Higher profits: They expect the combined company’s earnings per share to go up right away.

How Much Gildan Is Paying (and How They Calculated It):

• The total price works out to about 8.9 times HanesBrands’ yearly profit before taxes and certain accounting adjustments (a measure called EBITDA).
• If you include the $200 million in expected yearly savings, it’s more like 6.3 times that profit.
• Translation: They believe the cost savings make HanesBrands a better deal than it looks at first glance.

What does “$200 Million in Synergies” mean?

This is corporate shorthand for “ways we’ll save money and run things more efficiently.”

• Examples:
  • Combining offices, warehouses, and shipping systems.
  • Shifting more production to Gildan’s cheaper factories.
  • Cutting duplicate marketing, management, and IT costs. This is where many people will lost their jobs.
• They think they’ll reach the full $200 million savings by year 3 after the deal closes.

How They’re Paying for It:

• 87% of the payment is in Gildan stock.
• 13% is in cash (that’s the $0.80 per share).
• Gildan is also taking over HanesBrands’ $2 billion debt, but they’ll refinance it to get better terms.
• They’ve arranged $2.3 billion in financing to handle the cash portion and the debt refinancing.

Impact on Gildan’s Finances:

• Debt will be higher right after the deal, so they’ll pause stock buybacks until debt levels drop.
• They expect to keep an investment-grade credit rating (meaning lenders still see them as a low-risk borrower).

What they say Future Outlook (If the Deal Closes):

• Sales: Gildan expects  3–5% growth per year from 2026–2028.
• Profits per share: Hoping for low-20% growth per year in the same period.
• Once debt levels are down, they plan to keep paying dividends and possibly resume share buybacks.

Other Details:

• They say Gildan’s headquarters will stay in Montréal, but they’ll keep a major presence in Winston-Salem, NC, where HanesBrands is based. Many operations are out of the tax haven of Barbados, this is not mentioned but will surely continue.
• HanesBrands’ Australia division might be sold or restructured.
• The deal still needs shareholder and regulatory approval, and they expect to close it in late 2025 or early 2026. Hard to imagine in this current world that their would be any regulatory blowback, and one would think that the deal looks pretty sweet to shareholders.

Surely we will be hearing a great deal about how the companies will stay mostly the same and be operated independently, but surely as all the other times we have heard this, no doubt shirt styles will merge, familiar contacts will be reassigned or be gone, and who knows in Activewear if the Hanes brand will even continue into the future.