Antitrust Law Daily Wrap Up, ACQUISITIONS & MERGERS NEWS: Family Dollar cites antitrust concerns in rejecting Dollar General bid, (Aug 25, 2014)

By Jeffrey May, J.D.

Dollar General Corporation, the largest discount retailer in the United States, said last week that it will continue to pursue its proposed acquisition of Family Dollar Stores, Inc., despite Family Dollar's rejection of the proposal based on perceived antitrust concerns. Family Dollar's board of directors on August 21 unanimously reaffirmed its support for a pending merger with Dollar Tree, Inc.

Dollar Tree announced plans to acquire Family Dollar in July. The combination would create a discount powerhouse with over 13,000 stores in 48 states and five Canadian Provinces. Dollar General, which currently has more than 11,500 stores in 40 states, made public a proposal to acquire Family Dollar and its 8,100 stores across 46 states on August 18.

Despite Dollar Tree's size, the company described the antitrust issues associated with a proposed acquisition of Family Dollar as “manageable.” Rick Dreiling, Dollar General's Chairman and Chief Executive Officer, noted that the firm, after conducting extensive antitrust analysis, is confident in its ability “to quickly and efficiently resolve any potential antitrust issues.”

There is concern at Family Dollar that Dollar Tree has not provided sufficient details on how antitrust concerns over a proposed combination between the two firms would be resolved. Family Dollar Chairman and CEO of Family Dollar Howard R. Levine stated: “Our Board of Directors, with the assistance of outside advisors and consultants, has been carefully analyzing the antitrust issues in a potential combination with Dollar General since the beginning of this year . . . and unanimously concluded that it is not reasonably likely to be completed on the terms proposed.”

Companies: Dollar General Corp.; Dollar Tree, Inc.; Family Dollar Stores, Inc.

News: AcquisitionsMergers Antitrust