Page 2 of 2 Previous

Continued: All those dollar-store offers add up

  • Article by: MATT TOWNSEND , Bloomberg News
  • Last update: August 18, 2014 - 8:53 PM

The combined company also would be prepared to sell as many as 700 stores to gain antitrust approval, according to the statement. A combined company would have almost 20,000 locations, making it the nation’s largest retail chain in terms of locations. Wal-Mart, which generates far more sales per store, is the biggest retailer by revenue.

Spun-off stores

“If Dollar General wins, Dollar Tree might end up acquiring many of the stores Dollar General spins off,” Gordon said.

Dollar General, which is being advised by Goldman Sachs Group Inc., is “confident it can quickly and effectively address any potential antitrust issues.”

To help see the deal through, chief executive Rick Dreiling, 61, will remain in the CEO and chairman roles through May 2016. Beyond that date, he’d be willing to remain chairman if asked by the board and elected by shareholders, according to the statement. He had previously said he would retire in May of 2015.

Dreiling’s pending retirement led analysts to speculate that an offer for Family Dollar wouldn’t happen until his successor was in place.

Try, try again

Dollar General had expressed interest in combining with Family Dollar repeatedly over the past few years to no avail, Dreiling said Monday on a conference call with analysts. So he was surprised by the Dollar Tree agreement and said if he had known Family Dollar was open to a deal, he probably would have postponed his retirement.

Monday’s actions prove once again the relevance of activism, Icahn said in a statement.

Family Dollar and Dollar Tree are the No. 2 and No. 3 dollar-store chains by number of outlets, while Dollar General is the largest. Sales at the chains, which specialize in cheap household goods, have slowed since the U.S. economy began improving and consumers became less focused on finding bargains. Still, they’re outpacing the growth of bigger discount retailers, including Wal-Mart and Target Corp.

Wal-Mart is spending $600 million this year to add more Neighborhood Market and Express stores, aiming to get a larger piece of the neighborhood discount market. The smaller-format outlets have outperformed its supercenters and Sam’s Club locations.

  • related content

  • A Dollar General store in Texas, one of more than 11,000 stores nationwide.

  • Dollar General on Monday offered about $9 billion for Family Dollar, outbidding rival Dollar Tree.

  • get related content delivered to your inbox

  • manage my email subscriptions

ADVERTISEMENT

Connect with twitterConnect with facebookConnect with Google+Connect with PinterestConnect with PinterestConnect with RssfeedConnect with email newsletters

ADVERTISEMENT

Advertisement
Golden Gavel by Star Tribune

Time left for great deals

Bid thru Sept. 29

ADVERTISEMENT

ADVERTISEMENT

ADVERTISEMENT

ADVERTISEMENT

ADVERTISEMENT

 
Close