Antitrust Law Daily Wrap Up, ACQUISITIONS & MERGERS NEWS: FTC review of Dollar Tree-Family Dollar merger nears completion, (Apr 8, 2015)

By Linda O’Brien, J.D., LL.M.

The FTC has substantially completed its review of discount store chain Dollar Tree’s pending acquisition of rival discount retailer Family Dollar Stores, Inc., having identified 340 stores for divestiture, according to Dollar Tree’s Form 8-K filed with the U.S. Securities and Exchange Commission on April 7.

Dollar Tree, Inc. announced plans to acquire Family Dollar in July 2014. The combined entity would include over 13,000 stores in 48 states and five Canadian Provinces. Competitor Dollar General Corporation, 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 in August 2014. Subsequently, Family Dollar’s Board of Directors unanimously reaffirmed its support for a pending merger with Dollar Tree, Inc.

In September 2014, Family Dollar’s Board of Directors unanimously rejected the revised, non-binding proposal made by Dollar General Corporation on the basis of antitrust regulatory considerations.

According to a November 19, 2014 statement, Dollar Tree was in discussions with the FTC concerning the extent of divestitures that the Commission was seeking in connection with the Dollar Tree-Family Dollar merger. The parties expected to provide Family Dollar shareholders with an update regarding the status of the FTC review at a special meeting to be held the first week of December. The special meeting was delayed until December 23 to provide Family Dollar shareholders with sufficient time to review the additional disclosure in advance of the meeting.

The Family Dollar Board of Directors adjourned its December 23 special meeting until January 22, 2015, at which time the Family Dollar shareholders overwhelmingly approved the deal to be sold to Dollar Tree.

According to the SEC filing, Dollar Tree expects all or most of the divested stores to be Family Dollar stores. The company continues to make progress with potential divestiture buyers and has received multiple indications of interest from buyers who intend to operate the divested locations as dollar stores to address FTC concerns.

Dollar Tree stated that it is working to finalize divestiture agreements with the selected bidders in parallel to securing FTC approval. The proposed merger is expected to close in May 2015, subject to certain factors beyond the company’s control, including FTC approval.

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

News: AcquisitionsMergers Antitrust