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Dollar Tree buying Family Dollar for $8.5 billion

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NEW YORK (AP) — Dollar Tree is buying rival discounter Family Dollar, giving it a wider reach in the intensifying fight for deal-seeking customers.

The $8.5 billion deal will give Dollar Tree more than 13,000 stores in the U.S. and Canada. The current leading discounter, Dollar General Corp., has more than 11,300 stores in the U.S.

Dollar stores have struggled as major retailers including Wal-Mart Stores Inc. and Kroger have stepped up their courtship of lower-income customers by opening smaller store formats that compete more directly with such discounters. Sales are also suffering because the lower-income customers who go to dollar stores still haven’t recovered from the recession and its aftermath because of persistent job instability and slow wage growth.

Family Dollar shuttered stores and cut prices as result, and had been conducting a strategic review since the winter. Last month, investor Carl Icahn urged the company to put itself up for sale. Icahn has built up a stake in the company of more than 9 percent, according to regulatory filings.

On Monday, Dollar Tree CEO Bob Sasser noted that his company and Family Dollar have different business models. While all items sold at Dollar Tree cost just a dollar, Family Dollar charges a broader range of prices, which allows it to sell a greater variety of items including brand-name products such as Kraft cheese or Tide laundry soap.

As such, Sasser said the two chains “co-locate really well” and offer complementary merchandise.

The companies did not say if any Dollar Tree or Family Dollar stores would be closed. Dollar Tree will continue to operate under the existing Dollar Tree, Deals, and Dollar Tree Canada store banners. It will keep the Family Dollar brand as well.

Stockholders of Family Dollar Stores will receive $59.60 in cash and the equivalent of $14.90 in shares of Dollar Tree for each share they own. The companies put the value of the transaction at $74.50 per share, which is an approximately 23 percent premium to Family Dollar’s Friday closing price of $60.66.

Including debt and other costs, the companies estimate the deal to be more than $9 billion.

Family Dollar stockholders will own somewhere between 12.7 percent and 15.1 percent of Dollar Tree’s outstanding common shares at closing. Shares spiked more than 24 percent and were headed for an all-time high before the opening bell Monday.

Shares of Dollar Tree neared an all-time high.

The combined Dollar Tree-Family Dollar chain will have sales of more than $18 billion. Family Dollar Chairman and CEO Howard Levine will still lead those stores and report to Sasser.

Dollar Tree plans to finance the deal with available cash, bank debt and bonds.

The boards of both companies have unanimously approved the deal, which is expected to close by early next year. It still needs approval from Family Dollar shareholders.

Shares of Family Dollar Stores Inc., based in Charlotte, North Carolina, surged $14.89 to $75.55 in premarket trading. The record high during regular trading is $75.29.

Shares of Dollar Tree Inc., based in Chesapeake, Virginia, jumped 10 percent, or $5.50 to $59.72. The all-time high for that stock is $60.19.

Dollar Tree buying Family Dollar for $8.5 billion

KDWN

NEW YORK (AP) — Dollar Tree is buying rival discount store Family Dollar in a cash-and-stock deal valued at about $8.5 billion.

Stockholders of Family Dollar Stores will receive $59.60 in cash and the equivalent of $14.90 in shares of Dollar Tree for each share they own. The companies put the value of the transaction at $74.50 per share, which is an approximately 23 percent premium to Family Dollar’s Friday closing price of $60.66.

The companies put the enterprise value of the deal, including debt and other costs, at more than $9 billion.

Family Dollar stockholders will own somewhere between 12.7 percent and 15.1 percent of Dollar Tree’s outstanding common shares at closing. Shares spiked more than 24 percent and were headed for an all-time high before the opening bell Monday.

Shares of Dollar Tree neared an all-time high.

Core customers for bargain stores and major retailers like Wal-Mart have been among the hardest hit by the recession and its aftermath because of job instability.

Family Dollar has struggled and has attempted to reinvigorate sales by lowering prices on almost 1,000 basic items. It’s cut some jobs and shuttered underperforming stores.

The company had been conducting a strategic review since the winter, and investor Carl Icahn urged Family Dollar last month to put itself up for sale. Icahn has built up a stake in the company of more than 9 percent, according to regulatory filings.

Dollar Tree CEO Bob Sasser said Monday that the deal will give Dollar Tree more than 13,000 stores in the U.S. and Canada. That is nearly three times as many stores as Wal-Mart Stores Inc., though Wal-Mart’s square footage is still greater.

The companies did not say if any Dollar Tree or Family Dollar stores would be closed.

The combined Dollar Tree-Family Dollar chain will have sales of more than $18 billion and Sasser says that the transaction will create a more diverse company with an enhanced geographic reach.

Dollar Tree stores sell products for $1 or less, while Family Dollar’s pricing is much broader.

Dollar Tree will continue to operate under the existing Dollar Tree, Deals, and Dollar Tree Canada store signs. It will keep the Family Dollar brand as well.

Family Dollar Chairman and CEO Howard Levine will still lead those stores and report to Sasser. He will join Dollar Tree’s board.

Dollar Tree plans to finance the deal with available cash, bank debt and bonds.

The boards of both companies have unanimously approved the deal, which is expected to close by early next year. It still needs approval from Family Dollar shareholders.

Shares of Family Dollar Stores Inc., based in Charlotte, North Carolina, surged $14.89 to $75.55 in premarket trading. The record high during regular trading is $75.29. Shares of Dollar Tree Inc., based in Chesapeake, Virginia, jumped 10 percent, or $5.50 to $59.72. The all-time high for that stock is $60.19.

Dollar Tree buying Family Dollar for $8.5 billion

KDWN

NEW YORK (AP) — Dollar Tree is buying rival discount store Family Dollar in a cash-and-stock deal valued at about $8.5 billion.

Stockholders of Family Dollar Stores will receive $59.60 in cash and the equivalent of $14.90 in shares of Dollar Tree for each share they own. The companies put the value of the transaction at $74.50 per share, which is an approximately 23 percent premium to Family Dollar’s Friday closing price of $60.66.

The companies put the enterprise value of the deal, including debt and other costs, at more than $9 billion.

Family Dollar stockholders will own somewhere between 12.7 percent and 15.1 percent of Dollar Tree’s outstanding common shares at closing. Shares spiked more than 24 percent and were headed for an all-time high before the opening bell Monday.

Shares of Dollar Tree neared an all-time high.

Core customers for bargain stores and major retailers like Wal-Mart have been among the hardest hit by the recession and its aftermath because of job instability.

Family Dollar has struggled and has attempted to reinvigorate sales by lowering prices on almost 1,000 basic items. It’s cut some jobs and shuttered underperforming stores.

The company had been conducting a strategic review since the winter, and investor Carl Icahn urged Family Dollar last month to put itself up for sale. Icahn has built up a stake in the company of more than 9 percent, according to regulatory filings.

Dollar Tree CEO Bob Sasser said Monday that the deal will give Dollar Tree more than 13,000 stores in the U.S. and Canada. That is nearly three times as many stores as Wal-Mart Stores Inc., though Wal-Mart’s square footage is still greater.

The companies did not say if any Dollar Tree or Family Dollar stores would be closed.

The combined Dollar Tree-Family Dollar chain will have sales of more than $18 billion and Sasser says that the transaction will create a more diverse company with an enhanced geographic reach.

Dollar Tree stores sell products for $1 or less, while Family Dollar’s pricing is much broader.

Dollar Tree will continue to operate under the existing Dollar Tree, Deals, and Dollar Tree Canada store signs. It will keep the Family Dollar brand as well.

Family Dollar Chairman and CEO Howard Levine will still lead those stores and report to Sasser. He will join Dollar Tree’s board.

Dollar Tree plans to finance the deal with available cash, bank debt and bonds.

The boards of both companies have unanimously approved the deal, which is expected to close by early next year. It still needs approval from Family Dollar shareholders.

Shares of Family Dollar Stores Inc., based in Charlotte, North Carolina, surged $14.89 to $75.55 in premarket trading. The record high during regular trading is $75.29. Shares of Dollar Tree Inc., based in Chesapeake, Virginia, jumped 10 percent, or $5.50 to $59.72. The all-time high for that stock is $60.19.

Dollar Tree buying Family Dollar for $8.5 billion

KDWN

NEW YORK (AP) — Dollar Tree is buying rival discount store Family Dollar in a cash-and-stock deal valued at about $8.5 billion.

Stockholders of Family Dollar Stores will receive $59.60 in cash and the equivalent of $14.90 in shares of Dollar Tree for each share they own. The companies put the value of the transaction at $74.50 per share, which is an approximately 23 percent premium to Family Dollar’s Friday closing price of $60.66.

Family Dollar stockholders will own somewhere between 12.7 percent and 15.1 percent of Dollar Tree’s outstanding common shares at closing.

Core customers for bargain stores and major retailers like Wal-Mart have been among the hardest hit by the recession and its aftermath because of job instability.

Family Dollar has struggled and has attempted to reinvigorate sales by lowering prices on almost 1,000 basic items. It’s cut some jobs and shuttered underperforming stores. The company had been conducting a strategic review since the winter, and investor Carl Icahn urged Family Dollar last month to put itself up for sale.

Dollar Tree CEO Bob Sasser said Monday that the deal will give Dollar Tree more than 13,000 stores in the U.S. and Canada. That is nearly three times as many stores as Wal-Mart Stores Inc., though Wal-Mart’s square footage is still greater.

The combined Dollar Tree-Family Dollar chain will have sales of more than $18 billion and Sasser says that the transaction will create a more diverse company with an enhanced geographic reach.

Dollar Tree stores sell products for $1 or less, while Family Dollar’s pricing is much broader.

Dollar Tree will continue to operate under the existing Dollar Tree, Deals, and Dollar Tree Canada store signs. It will keep the Family Dollar brand as well.

Family Dollar Chairman and CEO Howard Levine will still lead those stores and report to Sasser. He will join Dollar Tree’s board.

Dollar Tree plans to finance the deal with available cash, bank debt and bonds.

The boards of both companies have unanimously approved the deal, which is expected to close by early next year. It still needs approval from Family Dollar shareholders.

Shares of Family Dollar Stores Inc., based in Charlotte, North Carolina, surged more than 21 percent before the opening bell. Shares of Dollar Tree Inc., based in Chesapeake, Virginia, are up more than 3 percent.

Dollar Tree buying Family Dollar for $8.5 billion

KDWN

NEW YORK (AP) — Dollar Tree is buying rival discount store Family Dollar in a cash-and-stock deal valued at about $8.5 billion.

Stockholders of Family Dollar Stores will receive $59.60 in cash and the equivalent of $14.90 in shares of Dollar Tree for each share they own. The companies put the value of the transaction at $74.50 per share, which is an approximately 23 percent premium to Family Dollar’s Friday closing price of $60.66.

Family Dollar stockholders will own somewhere between 12.7 percent and 15.1 percent of Dollar Tree’s outstanding common shares at closing.

Core customers for bargain stores and major retailers like Wal-Mart have been among the hardest hit by the recession and its aftermath because of job instability.

Family Dollar has struggled and has attempted to reinvigorate sales by lowering prices on almost 1,000 basic items. It’s cut some jobs and shuttered underperforming stores. The company had been conducting a strategic review since the winter, and investor Carl Icahn urged Family Dollar last month to put itself up for sale.

Dollar Tree CEO Bob Sasser said Monday that the deal will give Dollar Tree more than 13,000 stores in the U.S. and Canada. That is nearly three times as many stores as Wal-Mart Stores Inc., though Wal-Mart’s square footage is still greater.

The combined Dollar Tree-Family Dollar chain will have sales of more than $18 billion and Sasser says that the transaction will create a more diverse company with an enhanced geographic reach.

Dollar Tree stores sell products for $1 or less, while Family Dollar’s pricing is much broader.

Dollar Tree will continue to operate under the existing Dollar Tree, Deals, and Dollar Tree Canada store signs. It will keep the Family Dollar brand as well.

Family Dollar Chairman and CEO Howard Levine will still lead those stores and report to Sasser. He will join Dollar Tree’s board.

Dollar Tree plans to finance the deal with available cash, bank debt and bonds.

The boards of both companies have unanimously approved the deal, which is expected to close by early next year. It still needs approval from Family Dollar shareholders.

Shares of Family Dollar Stores Inc., based in Charlotte, North Carolina, surged more than 21 percent before the opening bell. Shares of Dollar Tree Inc., based in Chesapeake, Virginia, are up more than 3 percent.