February 26, 2016

Dollar Tree Purchases Family Dollar for $8.5 Billion

Dollar Tree officials agreed to purchase rival Family Dollar for approximately $8.5 billion in cash and stock, a move that would fuse two of North America’s largest deep-discount retailers.

The companies anticipate realizing approximately $300 million in annual cost savings by the end of 2018.

The deal follows pressure on Family Dollar leaders by investor Carl Icahn, who pressured the company, earlier this summer, to explore a sale of itself. However, Family Dollar officials said they have been mulling strategic options since last winter.

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. Including debt, the deal values the target company at about $9.2 billion, according to reports.

Combined, Family Dollar and Dollar Tree’s footprint will include more than 13,000 stores in 48 states and in Canada, and more than $18 billion in revenue. Dollar Tree plans to keep Family Dollar as a separate brand.



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