In a bid to take over dresser drawers across North America, one of Canada’s largest clothing brands is ready to cut a big cheque.
What happened: Canadian T-shirt giant Gildan Activewear is in advanced talks to buy U.S. underwear maker Hanesbrands in a deal valued at ~US$5 billion. If the deal closes, which it reportedly could within the week, it would mark Gildan’s largest acquisition ever.
- Hanesbrands has struggled in recent years, especially post-Liberation Day, while Gildan — which uses U.S. materials in its shirts — has largely avoided the wrath of tariffs.
Catch-up: Both companies recently faced activist investor battles, but they’ve had very different fortunes on the other side of them. Hanesbrands’ stock had fallen 40% this year before the announcement, while Gildan’s was near record highs after posting record sales and earnings last quarter.
- Funny enough, it was Gildan’s CEO Glenn Chamandy wanting to buy Hanes that had triggered the ugly boardroom battle that led to his temporary ousting and the replacement of the company’s entire board.
Why it matters: Canadian companies are rarely on the buying side of these blockbuster deals with U.S. competitors. Between 1985 and 2020, over 80% of Canadian firms acquired in foreign mergers and acquisitions were bought by American companies.
Bottom line: Gildan already dominates the generic shirt biz, producing roughly 1.2 billion shirts a year. If it can get this deal done, the Montréal company will expand its retail footprint well beyond the tees you get at concerts and bachelor parties.—LA