Attorney General Jim Hood announced the terms of a settlement that Mississippi and 16 other States have reached with Dollar Tree, Inc., following a review of the company’s proposed acquisition of Family Dollar Stores, Inc. The merger combines two large national chains of deep discount stores.
This announcement follows a coordinated effort among Mississippi, the Federal Trade Commission (FTC), and other state attorneys general. The group conducted a national review of the transaction, which resulted in the state attorneys general requiring Dollar Tree to sell more than 300 Family Dollar stores to a new competitor in order to complete the acquisition. All of the affected stores are to be sold and re-branded as Dollar Express stores, a new chain of deep discount stores being launched by Sycamore Partners. To accomplish this move, Mississippi and the other attorneys general have filed their lawsuit and proposed consent judgment in the Federal District Court for the District of Columbia.
“Dollar stores provide affordable access to household essentials. The states have worked with the FTC, Family Dollar, and Dollar Tree to ensure that the acquisition of Family Dollar does not lessen competition or create a hardship due to increased prices or store closures. As a result of these discussions, the parties do not intend to close or relocate any stores in Mississippi,” said Attorney General Hood.
Dollar Tree also will be required to report or notify the Attorney General’s Office of future acquisitions, store relocations, or closings.
Dollar Tree operates stores under both the Dollar Tree and Deals banners although there are no Deals stores currently in Mississippi. Stores using the Dollar Tree banner typically price all merchandise for $1. Family Dollar stores offer additional merchandise for slightly higher prices. The stores tend to be smaller in size and are often located within or near neighborhoods.
“These stores are located across Mississippi in both small towns and in our larger cities and suburbs,” said Attorney General Hood. “We wanted to ensure that competition would remain in areas where these stores were near each other, which will in turn result in the best prices and merchandise.”
Sycamore Partners is expected to acquire the stores being divested over the coming few months and operate them under its Dollar Express banner.
Dollar Tree (NASDAQ: DLTR) is headquartered in Chesapeake, Virginia and operates more than 4,200 stores nationwide. Family Dollar (NYSE: FDO) is headquartered in Matthews, North Carolina and operates more than 8,000 stores nationwide.
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