Dollar Tree to divest around 300 stores
Dollar Tree says it will need to divest around 300 stores if its acquisition of Family Dollar is to be approved.
Dollar Tree expects to reach agreement with the Federal Trade Commission (FTC) on the exact number and locations of the stores by the end of January.
The FTC provided the company with a preliminary number of stores - roughly 300 - that appear to raise concern. Dollar Tree said it expects some will be removed from this set to account for its banner's US$1 pricing model. A small number, however, may be added as some Family Dollar stores adjust prices partially based on the presence of Dollar Tree.
The US$8.5bn acquisition is expected to be completed as early as February, the company said in its update. It has faced competition for Family Dollar from rival Dollar General, which last month extended the deadline for its tender offer to acquire Family Dollar.
In a separate announcement, Family Dollar said the recommendation of its board is that stockholders vote ‘for' the merger with Dollar Tree.
CEO Howard Levine, said in an open letter: "I am pleased to reconfirm that both Trian Partners and I, in our capacities as the two largest Family Dollar stockholders, continue to share the view that a vote 'for' the Dollar Tree merger is in the best interests of Family Dollar stockholders."
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