Dollar Tree Updates On FTC's Review Of Pending Family Dollar Acquisition

(RTTNews) - Discount stores operator Dollar Tree, Inc. (DLTR) issued an update regarding the status of the Federal Trade Commission's or "FTC" review of its pending acquisition of Family Dollar Stores, Inc. (FDO).

The FTC's staff is focused on the discount retail sector, including how Family Dollar's current pricing rules would impact store prices in a merger transaction, and has indicated that some divestitures would be required for the pending merger, which it believes would be no more than its original commitment in the July 27, 2014, Merger Agreement. Over the next few weeks, Dollar Tree would diligently work with the FTC staff regarding divestitures.

Considering the relatively small number of divestitures its transaction implicates, Dollar Tree does not anticipate any such sale to have a material impact on its plans for the combined organization. Further, it expects to complete the financing for the pending merger in January 2015 and to complete the merger as early as February 2015.

While explaining its rationale concerning the pending merger, the staff of the FTC has expressed concerns on Family Dollar's current pricing rules applicable to certain stores where prices may increase if a local Dollar Tree was not present; certain overlaps between Family Dollar and multi-price Deals stores; and certain areas where Family Dollar and Dollar Tree face only a limited number of competitors.

The special meeting of Family Dollar shareholders to vote on the pending merger is currently slated for December 23, 2014. To aid the FTC's continued review, and considering the practicalities related to the transaction, both the companies have agreed not to close the pending merger until January 30, 2015, unless the FTC completes its review of the Merger and terminates the waiting period at an earlier date.