The dollar store wars rages on as Dollar General entered the race to takeover Family Dollar Stores, Inc. Monday with a bid of $78.50 per share, or approximately $9.7 billion. The proposal surpasses Dollar Tree’s $8.5 billion bid made in July.
Combined, the acquisition would solidify Dollar General’s position as the largest small-box discount retailer in the U.S., with 20,000 stores in 46 states, more than 160,000 employees, and sales exceeding $28 billion, the company revealed in a statement. The merger would also help expand Dollar General’s market share, which is primarily based in rural areas, to more metropolitan communities.
If the agreement is signed, Dollar General chairman and chief executive officer Rick Dreiling said he would postpone his announced retirement until May 2016 to help with the integration of the two companies.
Dreiling said, “For Family Dollar shareholders, our proposal is financially superior to the current transaction agreement with Dollar Tree and would provide Family Dollar shareholders with a substantial premium and immediate liquidity for their shares.” He added, “For Dollar General shareholders, the proposed combination of Dollar General and Family Dollar would be a significant strategic opportunity to create immediate and lasting shareholder value. For both Dollar General and Family Dollar customers, we would be able to provide better value and greater selection.”
Family Dollar confirmed that it is reviewing Dollar General’s offer, but has not alternated its support for a merger with Dollar Tree.