In what can only be described as a seismic shift for the North American apparel industry, Montreal-based Gildan Activewear has struck a deal to acquire U.S. underwear and T-shirt giant Hanesbrands for US$4.4 billion. The announcement, which came early Wednesday morning, marks one of the largest Canadian acquisitions of an American consumer goods company in recent years.
The all-cash transaction values Hanesbrands at US$12.35 per share—representing a 32% premium over its closing price on Tuesday. For Gildan, a company that built its reputation on wholesale blank apparel before expanding into branded offerings, this acquisition represents a dramatic expansion of its consumer-facing business.
“This is the apparel equivalent of a blockbuster trade in sports,” said Anita Chen, retail analyst at RBC Capital Markets. “Gildan is essentially doubling down on its core competency while simultaneously gaining massive retail distribution channels that would have taken decades to build organically.”
The deal brings together two companies with complementary strengths. Gildan’s efficient manufacturing operations and strong position in the printables market will now combine with Hanesbrands’ powerful consumer brands including Hanes, Champion, and Bonds. The resulting entity would control approximately 38% of the North American basic apparel market, according to data from Euromonitor International.
Looking at the numbers behind the acquisition reveals the strategic calculus. Hanesbrands generated US$6.2 billion in revenue last year, while Gildan reported C$3.6 billion (approximately US$2.7 billion). The combined company would have annual revenues approaching US$9 billion, creating a formidable competitor to rivals like Fruit of the Loom and Jockey.
“The financial logic is compelling,” explained Glenn Chamandy, CEO of Gildan, during an investor call. “We anticipate realizing approximately US$200 million in annual cost synergies within three years, primarily through streamlined manufacturing, distribution efficiencies, and consolidated administrative functions.”
For Hanesbrands, which has struggled with declining margins and nearly US$3.2 billion in debt, the acquisition offers a lifeline. The company’s share price had fallen nearly 40% over the past five years before this announcement, as changing consumer preferences and increased competition from private label products squeezed its traditional retail channels.
“Hanesbrands found itself caught between premium brands commanding higher prices and low-cost private labels undercutting them on price,” said Marcus Thompson, professor of retail management at Ryerson University’s Ted Rogers School of Management. “This deal gives them the manufacturing efficiencies they desperately need to remain competitive.”
The acquisition doesn’t come without potential hurdles. The Competition Bureau of Canada and the U.S. Federal Trade Commission will both scrutinize the deal for anti-competitive concerns. Industry observers expect the review process to take 6-9 months, with potential requirements to divest certain brand assets to secure approval.
Additionally, the combined company will face significant integration challenges. Gildan’s historical focus on B2B relationships contrasts with Hanesbrands’ extensive retail distribution network spanning mass merchants, department stores, and e-commerce platforms.
“Cultural integration will be just as important as operational integration,” noted Sarah Wilson, managing director at Deloitte’s Consumer Products practice. “Gildan has traditionally operated with a lean, manufacturing-focused mindset, while Hanesbrands has built sophisticated consumer marketing capabilities. Bridging those different approaches will require thoughtful leadership.”
The market reaction has been decidedly mixed. Hanesbrands shares jumped 30% on the news, while Gildan stock initially fell 7% before recovering slightly. Investors appear concerned about the substantial debt Gildan will take on to finance the deal, with the company securing US$3.8 billion in committed financing from a consortium of Canadian banks.
From a competitive standpoint, the acquisition dramatically reshapes the landscape. The combined entity would have unparalleled scale in basic apparel manufacturing, potentially putting pressure on competitors like Fruit of the Loom (owned by Berkshire Hathaway) and HanesBrands’ former subsidiary Champion (which operates independently in Europe and Asia).
“This is about surviving in an era where scale matters more than ever,” said Jordan Williams, retail industry analyst at TD Securities. “With rising input costs, complex global supply chains, and increasing ESG compliance requirements, only the largest players can afford the necessary investments while maintaining competitive pricing.”
For Canadian business, the acquisition represents a rare reverse of the typical cross-border flow, where U.S. companies more commonly acquire Canadian ones. It follows other notable Canadian expansions into the U.S. market, including Alimentation Couche-Tard’s convenience store empire and Restaurant Brands International’s ownership of Burger King and Popeyes.
“There’s a quiet confidence growing among Canadian companies in their ability to compete globally,” observed Patricia Rodriguez, senior economist at BMO Capital Markets. “We’re seeing more willingness to make bold moves, particularly when Canadian operational efficiency can be applied to American market access.”
The deal’s financing structure reveals current market dynamics. Rather than using equity, Gildan opted for an all-cash transaction financed primarily through debt—taking advantage of recently moderated interest rates following the Bank of Canada’s rate cuts earlier this year.
Looking ahead, industry watchers are already speculating about further consolidation in the apparel sector. “This deal will likely trigger a response from competitors,” predicted Thompson. “We could see private equity firms or strategic buyers making moves for mid-sized players like Delta Apparel or Bella+Canvas before they’re squeezed out by the new Gildan-Hanesbrands behemoth.”
For consumers, the impact remains to be seen. While executives promise the deal will not result in price increases, history suggests differently. “Consolidation typically leads to price rationalization over time,” cautioned Chen. “The combined company will have significantly more pricing power, particularly in wholesale channels where options for blank apparel are already limited.”
If approved, the acquisition is expected to close in the first quarter of 2026, creating North America’s undisputed leader in everyday essential apparel and fundamentally altering the competitive dynamics of a market that touches virtually every consumer.
