HanesBrands (HBI) M&A Announcement summary

Deal rationale and strategic fit

• The merger creates a global leader in basic apparel, expanding scale, product diversification, and leveraging iconic brands and a vertically integrated, low-cost manufacturing network.

• Enhanced go-to-market and retail capabilities, broader consumer reach, and balanced exposure across categories and channels are expected.

• The combined entity leverages complementary strengths in activewear and innerwear, with highly aligned product categories, manufacturing footprints, and customer bases.

• Enhanced resiliency to seasonal and cyclical variations and reinforced global low-cost manufacturing footprint.

Financial terms and conditions

• HanesBrands shareholders will receive 0.102 Gildan shares and $0.80 in cash per HanesBrands share, valuing HanesBrands at $6 per share and a total enterprise value of $4.4 billion.

• The offer represents a 24% premium to HanesBrands' closing price and an EV/EBITDA multiple of 8.9x (6.3x including synergies).

• The transaction is approximately 87% stock and 13% cash, with the cash portion totaling about $290 million.

• Gildan has secured $2.3 billion in committed financing and expects to refinance HanesBrands' $2 billion in debt.

• HanesBrands shareholders will own about 19.9% of the combined company upon closing.

Synergies and expected cost savings

• The merger targets at least $200 million in annual run-rate cost synergies within three years: $50 million in 2026, $100 million in 2027, and $50 million in 2028.

• Synergies will be driven by manufacturing optimization, SG&A reductions, logistics, IT consolidation, and leveraging available capacity.

• Synergies will enhance EBITDA margins from 20% to 23% pro forma.

• One-time costs to capture synergies are estimated at $200 million.

• No synergies are attributed to the Australia business, which is under strategic review for potential divestiture.