Attorney General Doug Peterson announced the terms of a settlement that he and 16 other States have reached with Dollar Tree, Inc., following their review of the company’s proposed acquisition of Family Dollar Stores, Inc. The merger combines two large national chains of deep discount stores.
Working with the Federal Trade Commission, the State Attorneys General are requiring Dollar Tree to sell 330 Family Dollar stores to a new competitor in order to complete the acquisition. All of the affected stores are to be sold and re-branded as Dollar Express stores, a new chain of deep discount stores being launched by Sycamore Partners. Sycamore Partners is expected to acquire the divested stores over the next few months. Without a remedy, the acquisition was likely to lessen competition by eliminating direct competition between Dollar Tree and Family Dollar and increase the likelihood that Dollar Tree could unilaterally exercise market power.
The Nebraska Attorney General’s Office participated in the merger review to ensure that there would still be competition to offer the best prices and merchandise where these stores were in close proximity. The two businesses have stores located across Nebraska in both our small towns and larger cities. After a thorough market analysis across Nebraska, it was determined that one store in Omaha would need to be divested to maintain competition in that area. In addition to this store being sold to Dollar Express, Dollar Tree will be required to notify the Nebraska Attorney General’s Office of future store relocations and closings.
Dollar Tree operates stores under both the Dollar Tree and Deals banners. Stores using the Dollar Tree banner typically price all merchandise for $1 while both Deals stores and Family Dollar stores offer additional merchandise for higher prices. The stores tend to be smaller in size and are often located within or near neighborhoods.
The Nebraska Attorney General’s Office worked with the Federal Trade Commission and the other Attorneys General in conducting a national review of the transaction. The Attorneys General have filed their lawsuit and proposed consent judgment in the Federal District Court for the District of Columbia.
Dollar Tree (NASDAQ: DLTR) is headquartered in Chesapeake, Virginia, and operates more than 4,200 stores, including more than 15 stores in Nebraska. Family Dollar (NYSE: FDO) is headquartered in Matthews, North Carolina, and operates more than 8,000 stores nationwide, including more than 30 stores in Nebraska.