Dollar Tree acquires Family Dollar

Wire report

YOUNGSTOWN

Virginia-based Dollar Tree said Monday it completed its $8.5 billion purchase of Family Dollar.

Bob Sasser, Dollar Tree’s chief executive officer, called the deal a “transformational opportunity” that will allow the company to offer merchandise to a wider array of customers.

“This acquisition will extend our reach to low-income customers while strengthening and diversifying our footprint,” Sasser said in the statement.

As part of the deal, Family Dollar shareholders will receive $59.60 in cash and about 0.25 of a share of Dollar Tree common stock for each share of Family Dollar common stock they own.

Dollar Tree will sell 330 Family Dollar stores to a New York private equity firm called Sycamore Partners within 150 days of the deal’s close. The firm said in May that it plans to operate the divested stores under the banner Dollar Express.

For the Family Dollar stores that remain, Dollar Tree has said that it will keep the chain’s name. Dollar Tree also said it will maintain Family Dollar’s headquarters.

What’s unknown for Family Dollar could come in the way of cost-cutting measures its new parent company plans to take over the next several years to make the combined company more profitable.

Dollar Tree has said it plans to trim annual expenses by $300 million in the deal over the next three years, which could include a slew of changes for Family Dollar, including possible layoffs for some of the 1,300 workers at Family Dollar’s corporate headquarters in North Carolina.

Cuts likely would have been more severe if the $9.1 billion rival bid by Dollar General for Family Dollar had been successful, analysts said.

Sasser said in the company’s annual shareholders meeting in June that he plans to lower prices at and improve the appearance of Family Dollar stores.

Sasser said the chain has strayed from its strategy in recent years by adding stores in suburban areas and raising prices on too many items.

While Sasser will be head of the combined company, Family Dollar CEO Howard Levine will join the board of directors.

The combined company will operate about 13,000 stores, making it the largest dollar-store chain in the U.S. by store count.

Local Family Dollar stores listed on the company’s website are: 4030 Market St., Boardman; 4026 South Ave., Boardman; 2708 Glenwood Ave., Youngstown; 3373 Canfield Road, Youngstown; 2224 Market St., Youngstown; 500 Youngstown-Poland Road, Struthers; 349 Robinson Road, Campbell; 1833 Oak St., Youngstown; 3345 Mahoning Ave., Youngstown; and 2932 McCartney Road, Youngstown.

Local Dollar Tree locations on the company’s website are: 4345 Kirk Road, Austintown; 1150 Doral Drive, Boardman; 541 Boardman-Poland Road, Boardman; and 405 East Main, Canfield. A new Dollar Tree location is under construction on South Avenue near Chelsea Court.