It generally only costs one dollar to buy something at Dollar Tree, but Dollar Tree is putting together a massive pile of dollars – 9.2 billion of them – in order to acquire Family Dollar. Well, not all of Family Dollar.
The FTC has some objections.
FTC noted that the two retail outlets utilize essentially the same business model, and basically service the same consumer base.
The presence of each in the same community fosters competition and thus benefits consumers.
FTC found 330 cases where the two are the only retailers in this class, and if the stores were allowed to merge, it would be the end of local competition. 35 states are involved.
As a condition of approving the merger, Dollar Tree will sell the stores to private equity firm Sycamore Partners.
“Dollar stores offer convenience and value by providing a broad assortment of general merchandise at discounted prices in stores close to where consumers live or work,” said Debbie Feinstein, Director of the FTC’s Bureau of Competition. “This settlement will ensure that consumers will continue to benefit from competition among their local dollar stores.”
The Sycamore divestiture must be completed within 150 days of the closing of the central transaction, and in the interim, the stores must remain under the care and feeding of Family Dollar.