Dollar Tree Develops Divestiture Plan Required For Family Dollar Acquisition

Dollar Tree, Inc. has issued an update regarding the U.S. Federal Trade Commission’s review of a proposed Family Dollar Stores, Inc. acquisition that concludes it will have to close few stores to accomplish a merger of the two companies. Dollar General Corp. also is pursuing the acquisition of Family Dollar.

The company said it and Family Dollar have remained actively engaged with the staff of the FTC as regards the potential merger of the companies. Dollar Tree said, based on those communications, it now believes that the company will need to divest fewer than 300 stores to have the acquisition of Family Dollar stores approved. Dollar Tree stated that it has made a divestiture proposal and anticipates reaching an agreement with the FTC staff by January’s end as to the specific number and locations of stores it will need to divest.

Dollar Tree noted that it has identified potential divestiture buyers and expects to present them to the FTC for approval within a month. It added that multiple potential buyers would conduct due diligence reviews over the next several weeks under non-disclosure agreements. Dollar Tree stated that it expects initial indications of interest to be forthcoming and will move to secure FTC approval and finalize divestiture agreements with the selected bidders as soon as practical.

In any Family Dollar acquisition, Dollar Tree holds that Dollar General would have to divest many more stores than the FTC would require it to sell off under anti-trust provisions, making its bid the more likely to succeed. Dollar General, which entered the pursuit of Family Dollar in August by offering a higher all-cash deal for the company’s stock than the bid Dollar Tree made three weeks earlier, asserts that its deal is superior.

Family Dollar scheduled a special meeting of shareholders to vote on the potential Dollar Tree/Family Dollar merger for January 22.