Family Dollar shareholders reportedly approved the proposed sale to Dollar Tree. Earlier this morning, the Family Dollar franchise sale to discount store rival Dollar Tree was approved, ending 56 years of locally-controlled stores by the once-thriving chain. Speculation about the sale going through after months of closed-door business discussions left Family Dollar staffers uncertain about their future.
Dollar Tree officials said that the Family Dollar discount store name will not disappear. Dollar Tree CEO Bob Sassar said “many” of the Family Dollar stores will remain open. Howard Levine, CEO of Family Dollar, will be joining the board of directors after the ink dries on the merger, and he will help manage the remaining stores going forward.
An unspecified, yet reportedly “significant” number of staffers from the Family Dollar headquarters will be retained in the now-combined company. Family Dollar reportedly employs approximately 1,300 corporate staffers at its headquarters, but the overall headcount of administrative officials is down by approximately 100. The Dollar Tree takeover of Family Dollar and uncertainty about the company’s future was cited as the reasons for the staffing decreases.
The Family Dollar-Dollar Tree deal is expected to close as early as March. Family Dollar was founded in 1959 by Leon Levine, who is now reportedly a “prominent philanthropist.” The discount chain franchise grew to 8,000 stores under the leadership of the founder’s son, Howard Levine.
Last summer, Family Dollar agreed to sell the company for $8.5 billion to Dollar Tree. The Virginia-based Dollar Tree and Tennessee-based Dollar General were the discount retailer’s largest competitors. During the negotiations between Family Dollar and Dollar Tree, Dollar General inserted itself into the running with an unsolicited bid. When Family Dollar turned down Dollar General’s offer, the rival chain allegedly made a “hostile bid” in an attempt to break up Dollar Tree and still buy Family Dollar.
Howard Levine felt that the Federal Trade Commission would probably attempt to block Dollar General if the deal went through. Dollar General officials reportedly believe that Levine’s worries were “overblown.” The offer to buy the Family Dollar chain from Dollar General was significantly higher than the assured bid from Dollar Tree.
“Today’s vote is a loss not only for Family Dollar shareholders, but also for consumers across the country who will not have the opportunity to benefit from the cost savings and efficiencies that we believe would have been created by a merger between Dollar General and Family Dollar,” Dollar General CEO Rick Dreiling said after learning of the Family Dollar sale to Dollar Tree.
What do you think about the Family Dollar buyout by Dollar Tree? Do you hope the chains remain the same or revamps their stores?
[Image via: Wikipedia]