Tuesday, July 29, 2014
Staff/wire report
NEW YORK
Dollar Tree is buying rival discount store Family Dollar in a cash-and-stock deal valued at about $8.5 billion.
Dollar Tree CEO Bob Sasser said Monday the deal will give Dollar Tree more than 13,000 stores in the U.S. and Canada.
The companies did not say whether any Dollar Tree or Family Dollar stores would be closed.
There are 34 Family Dollar stores in Mahoning, Trumbull, Columbiana, Mercer and Lawrence counties.There are 12 stores in the area owned by Dollar Tree, including 10 Dollar Tree stores and two Deals stores.
The combined Dollar Tree-Family Dollar chain will have sales of more than $18 billion, and Sasser says the transaction will create a more-diverse company with an enhanced geographic reach.
Dollar Tree stores sell products for $1 or less, while Family Dollar’s pricing is much broader.
Dollar Tree will continue to operate under the existing Dollar Tree, Deals and Dollar Tree Canada store signs. It will keep the Family Dollar brand as well.
Family Dollar Chairman and CEO Howard Levine will still lead those stores and report to Sasser. He will join Dollar Tree’s board.
Stockholders of Family Dollar Stores will receive $59.60 in cash and the equivalent of $14.90 in shares of Dollar Tree for each share they own. The companies put the value of the transaction at $74.50 per share, which is an approximately 23 percent premium to Family Dollar’s Friday closing price of $60.66.
The companies put the enterprise value of the deal, including debt and other costs, at more than $9 billion.
Core customers for bargain stores and major retailers such as Wal-Mart have been among the hardest hit by the recession and its aftermath because of job instability.