Dollar Tree (NASDAQ:DLTR) To Acquire Family Dollar Stores (NYSE:FDO)


The recent acquisition of the Family Dollar Stores (NYSE:FDO) by the famous Dollar Tree Inc. (NASDAQ:DLTR) was publically released during the last week of July. However, now for the first time it is revealed how this deal will actually work. Moreover, Dollar Tree (NASDAQ:DLTR) revealed some information as a result of Federal Trade Commission (FTC)’s investigation. The company mentioned that FTC seems to be interested in discount retail sector and the kind of aspects would be presented on the prevailing store prices by the company’s present pricing principles.  Moreover, Federal Trade Commission also stated that the company may need to sell some more assets to finalize their Pending Merger. But the company is quite sure that they will manage to fulfill the deal by February 2015.

However, the companies have not yet revealed the number of shops they are planning to sell off. But the company did mention that they will not let the Anti – trust Clearance become a hindrance for them and they will sell as many acquisitions that will mainly include stores as they are required to come out clean from the whole matter. Currently the combined store score stands at more than 13,300 stores, with about 5,000 stores belonging to Dollar Tree Inc. (NASDAQ:DLTR), and more than 8,200 are in acquisition of Family Dollar Inc. (NYSE:FDO). Beside this Federal Trade Commission is a bit worried about Family Dollar’s (NYSE:FDO) current pricing guidelines; according to which, some Family Dollar stores (NYSE:FDO) are allowed to raise prices if Dollar Tree (NASDAQ:DLTR) in not present in the vicinity. In short, the Commission is a bit concerned about these overlapped deals and pricing agreements.


Dollar Tree (NASDAQ:DLTR) also turned the acquisition of Family Dollar Inc. (NYSE:FDO) by the company. The company (NASDAQ:DLTR) rejected this proposal by commenting that the main company will require additional amount of divestitures than its initial estimates of about 1500 stores. In fact, Dollar Tree’s (NASDAQ:DLTR) answer was completely in accordance with what the Federal Trade Commission believes. However, Family Dollar (NYSE:FDO) will organize a vote for the offer presented by Dollar Tree (NASDAQ:DLTR). The vote is scheduled on Dec. 23. Both companies have not yet decided to close the deal until July, 30. 2015. However, if the Federal Trade Commission completes its review in the meantime and finds everything in order and advises the companies to finalize deal, they will not hesitate.

As for the latest news, Dollar Tree’s (NASDAQ:DLTR) stocks were inactive on Friday and closed at $69.27 on a 52 week range of $49.59 to $69.65 on Thursday; Dec, 4. Whereas, Family Dollar (NYSE:FDO) showed ascend of about 0.3%, with closing rate of $79.68 on 52 week range of $55.64 to $80.97 on Dec 4. The stocks were in active on Friday Dec, 5.

How this merger plays for both the companies remains to be seen and is expected to be revealed sooner than later. It is quite evident however, that the popularity of both group, due to their prices has garnered a niche among a very loyal consumer population.