Dollar Tree has bought out Family Dollar for $8.5 billion, according to an announcement Monday, July 28. This cash-and-stock deal is valued at $74.50 a share, and Family Dollar stockholders will obtain $59.60 in cash and $14.90 equivalent in Dollar Tree shares, according to USA Today.
“This acquisition will extend our reach to lower-income customers and strengthen and diversify our store footprint. We plan to leverage best practices across both organizations to deliver significant synergies, while we accelerate and augment Family Dollar’s recently introduced strategic initiatives. Combined, our growth potential is enhanced with improved opportunities to increase the productivity of the stores and to open more stores across multiple banners,” said Dollar Tree CEO Bob Sasser in a press release.
According to The Wall Street Journal, the recent recession brought the dollar stores a new band of customers, and they are desperate to hold on to these customers, as well as others they may have attracted during the economic downfall.
Hence, both companies expect to continue prospering with the union, and the Dollar Tree press release stated that Family Dollar CEO Howard Levine will continue on with the business and report directly to Sasser. With both powerhouse leaders on board, the store should have no difficulty gaining business.
“We are excited to welcome the Family Dollar team to Dollar Tree, and we look forward to working together to deliver increased value to the consumer and to our shareholders,” said Sasser in the press release.
