Dollar Tree, Family Dollar Deal to Lead to 300-Plus Store Closings
CHESAPEAKE, Va. —More than 300 dollar stores will move from the portfolios of Dollar Tree Inc. and Family Dollar Stores Inc. when their merger closes.
According to The Wall Street Journal, Dollar Tree reported the Federal Trade Commission (FTC) is nearing the end of its review of the pending deal. As part of the review, 340 stores have been tapped for divestiture.
Dollar Tree expects all or almost all of the stores to be divested to be Family Dollar locations. The shops represent about $47.4 million of operating income, the news outlet reported.
The retailer said it is making progress with potential buyers for the locations and has received multiple indications of interest. Each of the potential suitors intends to operate these divested locations as dollar stores to address the FTC's concerns.
Dollar Tree had indicated in February that it expected the agency to require the divestiture of no more than roughly 300 stores, though it warned at that time the FTC was reviewing more than 500 locations. The low number of potential divestitures was a key factor in the decision of Family Dollar shareholders earlier this year to vote for Dollar Tree's takeover bid instead of a higher offer from market leader Dollar General Corp., the WSJ added.
In July, Chesapeake, Va.-based Dollar Tree Inc. reached an agreement to buy Matthews, N.C.-based Family Dollar Stores Inc. for $8.5 billion, or $74.50 per share.