Canada's Gildan Activewear is buying HanesBrands for $2.2 billion

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Gildan Activewear is buying the struggling HanesBrands for $2.2 billion in a deal that gives the basic apparel maker access to household name brands like Hanes and Maidenform.

The companies put the transaction’s valued at about $4.4 billion when HanesBrands' debt is included.

Gildan, in addition to its namesake brand, also makes American Apparel and Peds.

HanesBrands' sales have fallen for three consecutive years and it hasn't turned an annual profit since 2021.

The North Carolina company sold its Champion brand last year to Authentic Brands Group for more than $1 billion. In February Target announced a multiyear strategic partnership with Champion, with products from the brand rolling out in the retailer’s store and on its website starting this month.

“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,” HanesBrands Chairman Bill Simon said in a statement Wednesday.

HanesBrands shareholders will receive 0.102 common shares of Gildan and 80 cents in cash for each share of HanesBrands common stock. They will own about 19.9% of Gildan stock once the deal closes.

Gildan has been experiencing some upheaval as well. In May 2024 its entire board resigned and appointed the nominees of activist investor Browning West as their replacements. CEO Vince Tyra also stepped down.

Gildan’s headquarters will remain in Montréal after the transaction is complete. The combined company will maintain a strong presence in Winston-Salem, North Carolina, where HanesBrands is located.

Gildan said that it plans to conduct a strategic review of HanesBrands Australia, which could include a sale.

The deal is expected to close later this year or early next year. It still needs approval from HanesBrands shareholders.

Shares of HanesBrands dropped nearly 4% before the market opened after spiking 28% Tuesday on rumors of a buyout.