New York-listed clothing company HanesBrands has agreed to sell the intellectual property and certain operating assets of its global Champion business to Authentic Brands Group.

The transaction value is US$1.2 billion, with the potential to reach up to $1.5 billion through an additional contingent cash consideration based on achievement of performance thresholds. 

The decision came after the HanesBrands board had reviewed a range of strategic options for the global Champion business.

Bill Simon, chairman of the board, said the deal will enable the company to accelerate its debt reduction as it focuses on extending its market share in the innerwear category. The firm also plans to boost investment into its major brands including Hanes, Bonds, Maidenform, and Bali.

As the new owner, Authentic intends to convert the Champion business into a licensed model. The company said it is in discussions with existing and potential operators in key regions to manage the manufacturing, physical retail, e-commerce, and wholesale operations of the business and maintain the brand’s global footprint.

The acquisition is expected to be finalised in the second half of this year, subject to customary closing conditions.