Dollar Tree to buy Family Dollar for $8.5 billion

by Staff Reports -


The company will operate more than 13,000 stores across 48 states and five Canadian provinces.

Dollar Tree Inc. announced Monday the company has entered into a definitive merger agreement under which Dollar Tree will acquire Family Dollar for about $8.5 billion in cash and stock.

The company will operate more than 13,000 stores across 48 states and five Canadian provinces.

Plans are to continue to operate and grow both the Dollar Tree and Family Dollar brands.

The value of the consideration is $74.50 per share, a 22.8 percent premium over Family Dollar's closing price as of July 25, 2014, according to the announcement on Dollar Tree’s corporate website.

The transaction, unanimously approved by the boards of directors of both companies, is expected to close by early 2015, at which time the Family Dollar shareholders will receive $59.60 in cash and $14.90 equivalent in Dollar Tree shares, subject to the collar described below. At closing, Family Dollar shareholders will own no less than 12.7 percent and no more than 15.1 percent of the outstanding common stock of Dollar Tree.

Howard R. Levine and Trian Fund Management, L.P. and funds managed by it, which collectively own approximately 16 percent of the outstanding stock of Family Dollar, have entered into voting agreements in support of the merger.

"This is a transformational opportunity," stated Bob Sasser, Dollar Tree's Chief Executive Officer.

"With the acquisition of Family Dollar Stores, Dollar Tree will become a leading discount retailer in North America, with over 13,000 stores in 48 states and five Canadian provinces, sales of over $18 billion, and more than 145,000 associates on our team,” Sasser said. “We will continue to operate under the Dollar Tree, Deals, and Dollar Tree Canada brands, and when this transaction is complete, we will operate under the Family Dollar brand as well.

“Throughout our history, we have strived continuously to evolve and improve our business. This acquisition, which enhances our footprint and diversifies our company, will enable us to build on that progression, and importantly, positions Dollar Tree for accelerated growth. By offering both fixed-price and multi-price point formats and an even broader, more compelling merchandise assortment, we will be able to provide even greater value and choice to a wider array of customers.”

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