Mergers & Acquisitions

Family Dollar Stockholders Approve Dollar Tree Merger

Dollar General fails to usurp deal

MATTHEWS, N.C. & CHESAPEAKE, Va. -- Family Dollar Stores Inc. said Thursday that stockholders voted at the company's special meeting of stockholders to approve the proposed merger with Dollar Tree Inc.

Dollar Tree Family Dollar Dollar General (CSP Daily News / Convenience Stores / Gas Stations)

Rival chain Dollar General was also attempting to acquire Family Dollar.

Based on the preliminary count, Family Dollar stockholders voted approximately 84 million shares in favor of the merger proposal. The favorable vote represents 74% of the total outstanding and 89% of the total shares voted. As of Oct. 30, 2014, the record date for the special meeting, there were approximately 114 million shares of Family Dollar common stock outstanding.

Family Dollar said it expects to release the final results after the votes have been tabulated and certified next week.

"We are pleased with the outcome of today's vote, and I want to thank Family Dollar stockholders for their support throughout this process," said Howard R. Levine, chairman and CEO of Family Dollar. "The Family Dollar board of directors and management team have worked diligently to advance the best interests of all of the company's stockholders, and we are grateful for the support we received for the merger proposal. … We look forward to completing the transaction with Dollar Tree and remain excited about the opportunity that this combination will create for our stockholders, team members, customers and other stakeholders."

"Today's vote of approval by Family Dollar shareholders represents a crucial step toward combining Dollar Tree, North America's leading fixed-price point discount retailer, with Family Dollar, a leading multi-price point retailer with a 50-plus year history of serving low- and middle-income customers," said Bob Sasser, CEO of Dollar Tree.

"By adding Family Dollar to our portfolio of brands, Dollar Tree will soon operate more than 13,000 stores in 48 states and five Canadian provinces with annual sales exceeding $18 billion," he said. "This merger enhances our geographic footprint and diversifies our business model. We intend to operate and grow both banners. At Dollar Tree stores, everything is $1 while Family Dollar stores will continue to serve low to middle-income customers with name-brand consumables, home basics, variety and seasonal products at discount store prices. By utilizing the $1 fixed-price point in Dollar Tree and multi-price points at Family Dollar, we will deliver even greater value and choice to a broader range of consumers."

Matthews, N.C.-based Family Dollar operates more than 8,100 stores in rural and urban settings across 46 states. Chesapeake, Va.-based Dollar Tree operates 5,282 stores in 48 states and five Canadian provinces.

By the end of January, Dollar Tree expects to reach a preliminary agreement with the Federal Trade Commission (FTC) on the list of substantially all of the stores to be divested, it said. Dollar Tree then plans to finalize divestiture agreements with the selected buyer or buyers, to address any concerns of the investigating state attorneys general and to execute a consent order with the FTC's Bureau of Competition.

To facilitate the FTC's continued review, and in light of the practicalities associated with the transaction, Dollar Tree and Family Dollar have agreed to provide the FTC with four weeks' notice prior to closing. The companies said they expect to initiate this four-week notice period, which may be terminated early by the FTC), after Dollar Tree executes a consent decree with the FTC's Bureau of Competition, which should enable the closing of the merger as soon as March 2015.

Dollar General chairman and CEo Rick Dreiling said, "Today's vote is a loss not only for Family Dollar shareholders, but also for consumers across the country who will not have the opportunity to benefit from the cost savings and efficiencies that we believe would have been created by a merger between Dollar General and Family Dollar."

He continued, "As we have said throughout this process, the scale of this combination would have provided better value and greater selection to customers of both Dollar General and Family Dollar. Despite our best efforts over the past few months, Family Dollar's lack of engagement and a contracted transaction timeline ultimately prevented us from completing this transaction."

Goodlettsville, Tenn.-based Dollar General operates more than 11,500 stores in 40 states.

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