Dive Brief:

• Family Dollar on Friday rejected a sweetened $9.1 billion takeover offer from segment leader Dollar General, claiming there were still outstanding potential antitrust issues.
• The company said it would instead stay with a $8.5 billion bid from Dollar Tree, which would merge the No. 2 (Family Dollar) and No. 3 (Dollar Tree) chains in the market.
• One unresolved question: If the Federal Trade Commission was expected to reject a Dollar General/Family Dollar merger on antitrust grounds, would it feel differently about the proposed alternative?

Dive Insight:

This merger battle has a lot of side threads going on, including the involvement of a big hedge fund and some interesting debates over exactly what role a dollar store will serve in the future. But underneath it all is Family Dollar's persistent claim that a merger with Dollar General will not pass regulatory muster.

Dollar General has tried to address that claim in several ways, including a pledge to sell up to 1,500 of its stores -- up from 750 in the last offer. But Family Dollar's preferred suitor, Dollar Tree, says it will close as many stores as needed to keep the FTC happy.

Meanwhile, the Family Dollar/Dollar Tree merger chugs on. Bloomberg Personal Finance reports that deal, if it's not stopped, could close as early as November.