News Feature | July 6, 2015

FTC Approves Final Acquisition Of Family Dollar By Dollar Tree

Christine Kern

By Christine Kern, contributing writer

FTC Approves Final Acquisition Of Family Dollar By Dollar Tree

Final sale comes after months of negotiations and competition

The Federal Trade Commission ruled on July 2 in a 4 to 1 vote that the agency had approved the $9.2 billion acquisition of Family Dollar by discount retail rival Dollar Tree. The deal includes the stipulation that some 330 Family Dollar stores are sold off in an anti-trust move to preserve competition in certain markets.

The deal was expected to close July 6, and it will create the nation’s largest dollar store chain.

In April, the FTC had identified approximately 340 stores that needed to be divested in order to complete the sale.  As early as August, Dollar Tree had announced that it was willing to divest whatever stores were necessary to complete the acquisition. Now, private equity firm Sycamore Partners is all lined up to acquire those Family Dollar stores, the companies have said. 

Things got complicated during the acquisition process when Dollar General entered the fray as a competitor for the Family Dollar chain. Quibbling over bids and the anti-trust issues lasted for several months. Despite the fact that Dollar General increased its bid more than once — higher than that of Dollar Tree in fact — and resorted to a negative campaign, it was never willing to adequately address Family Dollar’s antitrust concerns, ultimately leading Family Dollar to accept Dollar Tree’s offer because of its willingness to commit to divest of stores the FTC deemed anti-competitive.

The FTC stated in its ruling that the companies ‘compete head-to-head in terms of price, product assortment, and quality, as well as location and customer service in local markets nationwide.”

The FTC required the divestiture to avoid the “increasing likelihood that Dollar Tree will unilaterally exercise market power.”  And Debbie Feinstein, director of the FTC’s Bureau of Competition explained, ‘This settlement will ensure that consumers will continue to benefit from competition among their local dollar stores.”