Gildan apparel at a store in Montreal, Quebec, Canada, on Friday, Dec. 15, 2023.
Graham Hughes | Bloomberg | Getty Images
U.S. undergarments maker Hanesbrands has agreed to a takeover by Canada’s Gildan Activewear in a cash-and-stock deal valued at $4.4 billion, the companies said on Wednesday.
Shares of Hanesbrands fell 6% in premarket trading after surging as much as 40% a day earlier, when news of the deal first emerged.
The Financial Times first reported on the potential deal on Tuesday, followed by other media outlets, including Reuters.
The deal caps a turbulent chapter for Hanesbrands, marked by years of underinvestment, heavy debt and a string of acquisitions that produced mixed results since it was spun off from conglomerate Sara Lee in 2006.
Gildan will pay about $6 per Hanesbrands share, representing a 24% premium to Monday’s close and implying an equity value of $2.2 billion.
The combination is expected to double Gildan’s revenues and enhance its market position by leveraging Hanes’ strong brand presence in activewear, according to the statement.
Sales have plunged over the last three years amid stiff competition in the athleisure market and cooling demand, but cost-reduction efforts and supply-chain improvements lifted its margins in the past year.
Hanesbrands’ stock has lost 40% of its value so far this year and has shed roughly 86% of its value since its all-time high hit in April 2015, as of Monday’s close.
The transaction is expected to close in late 2025 or early 2026.