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Dollar Tree to acquire Family Dollar Stores

Dollar Tree announced Monday (July 28) it plans to acquire rival Family Dollar Stores for an estimated $8.5 billion in cash and stock for a total of $9.2 billion, including debt.

Under the terms of Monday’s deal, Dollar Tree will pay $74.50 for each share of Family Dollar. The bid is made up of $59.60 a share in cash and Dollar Tree stock worth about $14.90. The bid represents a premium of nearly 23% to Family Dollar’s closing price on Friday (June 25).


Family Dollar rose 22% in premarket trading on Monday, at $74, while shares in Dollar Tree were up about 6.5%, at $57.75.

Outspoken investor Carl Icahn has pushed for the sale of Family Dollar in recent months, and even threatened to unseat board members who disagreed. 


CEO Howard Levine, and the investment firm of the billionaire Nelson Peltz, have already agreed to support the deal.
 Together, the two companies will have more than 13,000 stores in 48 states and in Canada, and more than $18 billion in revenue. Dollar Tree said it plans to keep Family Dollar as a separate brand.

“This is a transformational opportunity,” Bob Sasser, Dollar Tree’s CEO, said in a statement. “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.”

The companies expect to realize about $300 million in annual cost savings by the end of the third year after closing, which is expected by early next year.

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