Family Dollar-Dollar Tree deal could close in February

Dec 5, 2014, 2:48pm EST

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Ben Torres | Bloomberg

The Federal Trade Commission is still reviewing a pending $8.5 billion merger between discount retailers Family Dollar Stores Inc. and Dollar Tree Inc.

Staff Writer- Charlotte Business Journal
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Dollar Tree Inc. (NASDAQ:DLTR) says its pending $8.5 billion merger with Family Dollar Stores Inc. (NYSE:FDO) could close as early as February.

That transaction is still being reviewed by the Federal Trade Commission, but Dollar Tree issued a statement on Friday related to that acquisition.

It expects it will have to divest fewer than 500 stores for the deal to close. That cash-and-stock transaction is valued at $74.50 per share.

That statement notes the FTC remains focused on how prices may be affected by a Family Dollar-Dollar Tree merger. That includes whether prices would increase if the retailer didn't compete head to head or the retailers face a limited number of competitors.

"We believe that the FTC staff appreciates that Dollar Tree and Family Dollar are different retailers with complementary business models," it reads.

Dollar Tree offers products for a $1 or less and is typically in suburban markets. Family Dollar, founded by CEO Howard Levine's father, Leon, in 1959, has multiple price points and focuses on rural and urban markets.

Family Dollar has scheduled a shareholder vote on its merger with Dollar Tree Inc. for Dec. 23.

Integration planning related to that merger is ongoing.

"Given the relatively small number of divestitures our transaction implicates, Dollar Tree does not expect any such divestiture to have a material impact on its plans for the combined organization," it states.

At the same time, Dollar General said this week that it remains as "committed as ever" to acquiring Family Dollar. The discount retailer is in the midst of a hostile takeover bid for Family Dollar.

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Jennifer Thomas covers retail, health care and education for the Charlotte Business Journal.

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