By Chelsey Dulaney
Dollar General Corp. said Friday that it is still in discussions
with U.S. regulators about its unsolicited offer to buy Family
Dollar Stores Inc., but it didn't elaborate on what divestitures
regulators may require to approve the deal.
The update comes ahead of Family Dollar's shareholder vote on
its pending $8.5 billion deal to be bought by Dollar Tree Inc. The
vote is scheduled for Tuesday.
Dollar General didn't comment Friday on how the talks with
antitrust regulators have gone. The company said it doesn't expect
to provide further updates before the Family Dollar shareholder
vote on the Dollar Tree deal.
Earlier this month, Dollar Tree gave an optimistic update on its
pending deal, saying it will have to divest a "relatively small"
number of stores to secure U.S. antitrust approval of the deal,
which could close as early as February. Dollar Tree said it would
work with the Federal Trade Commission to determine what
divestitures would be required, but added that it would likely be a
small number of stores that won't be material to its plans for the
combined company.
Meanwhile, larger rival Dollar General also has been in talks
with the FTC about a potential acquisition of Family Dollar. Its
$9.1 billion unsolicited bid was shot down in September by Family
Dollar, which claimed the antitrust risks were too high.
Dollar General has said it would be willing to divest up to
1,500 stores, but Family Dollar's chief executive, Howard Levine,
has said there is a "very real and material risk" that Dollar
General's offer would fail to pass a lengthy regulatory
process.
At the heart of the FTC's review are the similarities among the
discount retailers' businesses and how a combination could affect
competition and pricing. Dollar General and Family Dollar both sell
a variety of consumable and household products at a range of
prices, while Dollar Tree primarily sells goods for $1 or less.
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
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