Dollar Tree’s Acquisition of Family Dollar Stores

On July 28, 2014, US discount retailer, Dollar Tree Inc., announced that it would acquire the US-based discount retailer Family Dollar Stores (Family Dollar), for US$ 8.5 billion. The amount would be paid in cash and shares. Dollar Tree was a leading US-based discount variety store headquartered in Chesapeake, Virginia, selling items for $1 or less. In 2008, the company found a place in the Fortune 500 list. Family Dollar was a multi-price point retailer headquartered in Matthews, North Carolina. In 2002, the company was included in the Fortune 500 list. In 2014, Family Dollar approved a one-year shareholder rights plan with a trigger of 10% holding of its stock to prevent the hostile takeover of the company by an individual or a group. Analysts were of the view that the acquisition would be beneficial to both companies. Bob Sasser, Chief Executive Officer of Dollar Tree, said that the merger of the two companies would enhance their geographic footprint and diversify the business model.