Dive Brief:
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A review of the proposed sale of Family Dollar tree to discount rival Dollar Tree would require Dollar Tree to close no more than 500 stores to resolve antitrust concerns, sources have told Bloomberg.
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That matches up with the number of stores Dollar Tree has said it expected to close. The Chesapeake, VA-based discount retailer has offered $8.5 billion in stock and cash to acquire Charlotte, NC-based Family Dollar.
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It’s also in contrast to the closure of 4,000 or more stores that the FTC says could be required of Goodlettsville, TN-based Dollar General if it merged with Family Dollar. That amount is significantly more than the 1,500 stores Dollar General has said it would willingly lose in its own $9.1 billion bid to take over its rival.
Dive Insight:
Dollar General has been assertive in its efforts to supersede Dollar Tree in a potential merger with Family Dollar, increasing its offer, taking it straight to Family Dollar’s board, and publicly questioning the motivations of Family Dollar’s CEO. The one thing it hasn’t really done is agree to address Family Dollar’s stated concern over antitrust issues. The reviews by the Federal Trade Commission back up Family Dollar’s position, that a merger with Dollar General would throw up antitrust red flags that could endanger any sale.
