Canadian apparel maker Gildan Activewear Inc. has agreed to buy U.S. underwear company Hanesbrands Inc. in a deal worth about $2.2 billion in cash and stock, marking Gildan’s largest acquisition to date.
The offer values Hanesbrands’ shareholders at roughly $6 per share, based on the closing prices on August 11, according to a joint statement released on Wednesday. When including debt, the transaction values Hanesbrands at around $4.4 billion.
Hanesbrands, best known for its men’s and women’s innerwear lines such as Maidenform, will now join Gildan’s portfolio as the companies aim to strengthen their position in the global basics and underwear market.
Gildan said it expects the deal to deliver at least $200 million in cost savings within three years, and to increase its earnings per share by at least 20%.
Market reaction to the news was mixed. Hanesbrands shares fell 7.4% in premarket trading on Wednesday, after a sharp 28% gain on Tuesday when reports of the acquisition first surfaced.
Background on the Companies
Gildan Activewear, headquartered in Montreal, Canada, is a leading manufacturer of everyday apparel including t-shirts, socks, and underwear. The company is known for producing low-cost basics and distributing them across North America and internationally. Over the years, Gildan has grown through acquisitions and its large-scale manufacturing operations.
Hanesbrands Inc., based in North Carolina, is a well-known American clothing company specializing in underwear, activewear, and basics. Its popular brands include Hanes, Champion, Playtex, and Maidenform. The company has a long history in the U.S. market and is recognized worldwide for its strong presence in innerwear.
By acquiring Hanesbrands, Gildan aims to expand its product portfolio, reduce costs, and strengthen its position in the competitive apparel industry.
