Gildan Activewear Inc. CEO Glenn Chamandy was ousted from the company in 2023. A months-long proxy battle led to his reinstatement as several large shareholders campaigned for his return.Christinne Muschi/The Canadian Press
Less than two years after first proposing a multibillion-dollar acquisition of Hanesbrands Inc. HBI-N that the Gildan Activewear Inc. GIL-T board of directors at the time dismissed as reckless, Glenn Chamandy got the deal done.
Mr. Chamandy, chief executive officer of the Montreal-based T-shirt maker, announced the transaction on Wednesday.
The long-time CEO was reinstated in May, 2024. A US$89-million proxy battle returned him to the job several months after his ouster.
Gildan will pay a mix of cash and stock for the North Carolina-based underwear producer, valuing the company at US$2.2-billion. Including roughly US$2.2-billion in Hanesbrands debt, which Gildan plans to refinance, the total purchase price is approximately US$4.4-billion.
It is by far the largest acquisition Gildan has ever attempted since the company was founded in 1984, though Mr. Chamandy is confident integration should go smoothly.
“It is not deviating from what Gildan does best, it is really underwear, socks, T-shirts, sweatshirts, things that we understand,” Mr. Chamandy told analysts on a Wednesday morning conference call. “Their processes are the same as ours, their customers are the same as ours, their distribution centres function just like ours do.”
“These are two pieces that move very close together, and although it is large, we feel it is very complimentary.”
The combined company will be a global behemoth, with roughly US$6.9-billion in annual revenue, 91,000 employees and 38 textile and sewing facilities spread across Central America, the Caribbean and Southeast Asia. Mr. Chamandy said Gildan expects to generate “at least” US$200-million in annual cost savings within three years of the deal closing, which is expected by early 2026.
Hanesbrands revenues have been declining for the past two years and more recently, its stock has been hit hard by the tariffs imposed on various countries by U.S. President Donald Trump. The company’s New York Stock Exchange-listed shares have lost roughly half their value since the start of 2025, falling from more than US$8 per share to US$4.83 per share as of Aug. 11, the day before the sale to Gildan was reported to be in the works.
Gildan nears deal to buy Hanesbrands at about $5-billion valuation
Despite reports on Tuesday suggesting that a deal was close to fruition, multiple analysts said confirmation would likely take investors by surprise as Gildan has historically focused on growing organically. Less than two weeks ago, Mr. Chamandy dismissed the idea of pursuing growth through acquisition.
“It’s a lot more advantageous to gain share than buy share,” Mr. Chamandy said on a July 31 earnings call in response to a question from National Bank Financial analyst Vishal Shreedhar about whether Gildan had any near-term acquisition plans.
“We’re not to say that we wouldn’t look at something at the right opportunity, but right now, I think we’re very focused on delivering on our core strength,” he said.
In a note to clients on Tuesday, Stifel analyst Martin Landry also expressed surprise at early reports of the deal, in part because Gildan has been buying back its shares up until July 31. Gildan chief financial officer Luca Barile said on the Wednesday call with analysts that the company was pausing its share-repurchase program.
Gildan is offering the equivalent of US$6 per share for Hanesbrands, with shareholders of the American company expected to own slightly less than 20 per cent of Gildan once the transaction is completed.
Hanesbrands shares were trading above the Gildan offer price on Wednesday afternoon, suggesting some investors may be betting on the possibility of another bidder emerging. Gildan’s Toronto Stock Exchange-listed shares, meanwhile, were trading nearly 11 per cent higher as of 1 p.m. ET.
Mr. Chamandy first proposed buying Hanesbrands in an October, 2023, presentation to the Gildan board of directors. The board considered the idea reckless and two months later, he was forced to leave the company where he had worked for 40 years, including 20 as CEO.
“I’m very angry with the way they handled me, to be honest with you,” Mr. Chamandy told The Globe and Mail shortly after his ouster.
Ex-CEO Glenn Chamandy finds his record scrutinized as Gildan’s shareholders mull leadership change
What followed was a months-long proxy battle where several of Gildan’s largest shareholders campaigned for his reinstatement. Led by activist investor Browning West LP and supported by other fund managers such as Jarislowsky Fraser Ltd., Turtle Creek Asset Management Inc. and Anson Funds, the campaign successfully replaced the entire board of directors at Gildan’s May, 2024 annual general meeting and returned Mr. Chamandy to the top job.
The new board, chaired by former United Rentals CEO Michael Kneeland, has unanimously approved the offer to buy Hanesbrands.
Browning West later sold a large portion of its stake in Gildan, though the Los Angeles-based fund manager continues to hold roughly 3 per cent of the apparel maker and is broadly supportive of the Hanesbrands acquisition.
“The strategic and economic rationale of the Gildan-Hanesbrands combination is very sound,” Browning West founder and managing partner Usman Nabi said Wednesday in an e-mail.
“The strong board foundations, which we helped establish last year, give us great confidence in its potential success.”
Buying Hanesbrands also allows Gildan to significantly diversify its product mix. According to Bank of Montreal analyst Stephen MacLeod, the combined company will be evenly split between activewear and undergarment products, which are also known in the industry as innerwear. Currently about 90 per cent of Gildan’s product lineup falls into the activewear category.
Hanesbrands has struggled to enter the activewear market itself. Its Champion sportswear brand had been a long-time drag on earnings until the division was sold to Authentic Brands Group for about US$1.2-billion last year.