In a vote resolving months of speculation over the future of the small discount space, Family Dollar Stores shareholders on Thursday approved the proposed $8.5 billion merger with Dollar Tree.
Based on a preliminary count, approximately 84 million shares were voted in favor of the merger proposal, Family Dollar said. The favorable vote represents 74% of the total outstanding and 89% of the total shares voted.
The combined companies would operate more than 13,000 stores in 48 states and Canada, with sales of more than $18 billion — around $12 billion in food and consumables, according to SN's Top 75 estimates.
Family Dollar had also been pursued by larger rival Dollar General, but support for that $9.7 billion offer fizzled this month amid reports that the Federal Trade Commission would require up to 4,000 divestitures to preserve competitive conditions. Dollar Tree in the meantime threatened to walk away from its offer if shareholders hadn’t approved it this week, after Family Dollar twice delayed the vote.
“We are pleased with the outcome of today’s vote, and I want to thank Family Dollar stockholders for their support throughout this process,” Howard R. Levine, chairman and CEO of Matthews, N.C.-based Family Dollar. “The Family Dollar board of directors and management team have worked diligently to advance the best interests of all of the company's stockholders, and we are grateful for the support we received for the merger proposal.”
Chesapeake, Va.-based Dollar Tree said Thursday that it expects to reach a preliminary agreement with the FTC on the list of stores to be divested to gain approval, believed to be around 300. Dollar Tree then plans to finalize divestiture agreements with selected buyers.
The merging companies said they anticipate closing the deal as soon as March. Bob Sasser, Dollar Tree’s CEO, will continue to lead the company. Levine will report to Sasser, and become a member of the Dollar Tree board.
Under terms of the deal, which was announced in July, Family Dollar shareholders will receive $59.60 in cash and $14.90 in equivalent Dollar Tree stock for each share of Family Dollar stock. At closing, Family Dollar shareholders would own between 12.7% and 15.1% of Dollar Tree.
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