After an earlier offer for Family Dollar was rejected because of antitrust concerns, Dollar General increased its price to $80 a share in cash. Along with the sweetened bid, it pledged to divest as many as 1,500 locations to placate regulators, up from 700 in its earlier offer. It also said it would pay Family Dollar $500 million if the deal failed to garner approval.
Wal-Mart Stores Inc. (WMT), the largest retail chain in total revenue, has served as a wild card in the saga. It’s pushing deeper into the market for neighborhood discount stores, potentially providing more competition within the industry. To get the deal past the Federal Trade Commission, Dollar General may have to establish that Wal-Mart and other retailers provide enough of a counterweight to a dominant dollar-store chain.
“We now can begin the antitrust review process and will have an opportunity to present our position directly to the FTC,” Dollar General CEO Rick Dreiling said today. “As we previously have stated, we are confident in the results of our antitrust analysis, and we look forward to a constructive dialogue with the FTC.”
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