Dollar Tree To Buy NC Based Family Dollar For $8.5 Billion

Dollar Tree is buying competitor Family Dollar in a cash-and-stock deal worth about $8.5 billion.

The boards of both companies unanimously approved the merger, announced Monday. The transaction is valued at $74.50 a share. Family Dollar shareholders will receive $59.60 in cash and $14.90 in equivalent Dollar Tree shares.

In a press release, Dollar Tree CEO Bob Sasser called the deal a "transformational opportunity."

"This acquisition will extend our reach to lower-income customers and strengthen and diversify our store footprint," he said.

Family Dollar CEO Howard Levine will keep his position and report to Sasser. Levine's company will continue to operate under the Family Dollar name. The combined company will have more than 13,000 stores and more than $18 billion in sales.

Family Dollar has been struggling in recent months to attract customers. After announcing an expansion plan last year that included tripling its store footprint, Family Dollar backed off in April. It announced it would actually close about 370 stores after a disappointing second quarter.

In June, billionaire investor Carl Icahn, who has a 9.4% stake in Family Dollar, wrote a letter to Levine encouraging him to sell the company and replace some board members.

Levine, in a statement, said the acquisition "represents the successful culmination of a comprehensive strategic review process," his board began this past winter. "This combination will enable Family Dollar to accelerate efforts to improve the business..."


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