Dollar Tree Buys Competitor Family Dollar for $8.5 Billion

Dollar Tree Buys Competitor Family Dollar for $8.5 Billion
Image: Pixabay
July 29, 2014

Discount retailer Dollar Tree will buy out its competitor, Family Dollar, in an $8.5 billion deal in cash and stock.

By acquiring Family Dollar, Dollar Tree will operate more than 13,000 stores in 48 states and five Canadian provinces. The stores employ more than 145,000 workers and sales are expected to exceed $18 billion.

"The acquisition of Family Dollar is consistent with our vision to be the leader in value retailing," Dollar Tree CEO Bob Sasser said in a prepared statement released by the company.

Family Dollar will continue to operate under its current name and offer products at a variety of market-rate and discounted prices. Dollar Tree customers will continue to find products for $1 or less. The deal is expected to close in early 2015.

The merger will also increase the company's consumer base as Family Dollar tends to operate in low-income urban and rural areas, while Dollar Tree caters to a more affluent suburban audience.

Dollar General, another popular discount store, will be vying for the same audience.

Discount stores have been struggling to hold their own against big box retailer Walmart. The discount behemoth, however, has also suffered losses.

Family Dollar has struggled more than most with an announcement last year that it would close 370 of its stores.