Dollar General Climbs Atop Dollar Tree
NEW YORK (The Deal) -- Dollar General
Goodlettsville, Tenn.-based Dollar General made the offer to Family Dollar's board in a letter disclosed Monday.
The competing bid values the Charlotte, N.C.-based discounter at nearly $9.6 billion including cash and debt. Dollar General said in its announcement that its offer gave Family Dollar a $9.7 billion valuation.
Dollar General said that combining the two retailers would create a powerhouse with sales of over $28 billion and a chain of nearly 20,000 stores in 46 states, solidifying the acquirer's position as the largest dollar-themed retailer. It would also, importantly, generate cost-saving synergies of $550 million to $600 million per year after three years.
Dollar General said it can address any potential antitrust issues as a result of the transaction by divesting up to 700 stores to get approval.
Dollar Tree's offer, which included a combination of stock and cash, valued Family Dollar at $74.50 per share, equating to a market cap of about $8.49 billion when taking into account the nearly 114 million shares outstanding.