In the end Family Dollar danced with who brung ’em — leaving behind a rejected suitor feeling twice beaten.
Shareholders of Family Dollar voted to approve its $8.5 billion merger with Dollar Tree, after support for a $9.7 billion counteroffer from Dollar General fizzled out amid reports the Federal Trade Commission would require some 4,000 store divestures for approval of the latter deal — more than twice the number of locations Dollar General was prepared to give up.
Goodlettsville, Tenn.-based Dollar General didn’t dispute the divestiture figures, but said the FTC arrived at them using a “controversial” and “untested” methodology, and that the agency set unrealistic deadlines to comply. An FTC spokeswoman declined comment on those accusations.
Dollar General directed further disappointment toward Family Dollar, saying it could have used its rival’s support — not only for what it considered a superior offer — but in its objection to the FTC’s stance.
The vote to approve the Dollar Tree offer was “a loss not only for Family Dollar shareholders, but also for consumers across the country who will not have the opportunity to benefit from the cost savings and efficiencies that we believe would have been created by a merger between Dollar General and Family Dollar,” Dollar General CEO Richard Dreiling said. “Despite our best efforts over the past few months, Family Dollar’s lack of engagement and a contracted transaction timeline ultimately prevented us from completing this transaction.”
The winning combination of Dollar Tree and Family Dollar would operate more than 13,000 stores in 48 states and Canada, with annual sales of more than $18 billion, or around $12 billion in food and consumables. Those figures bring it in closer competition to the biggest of the small discounters, Dollar General.
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