Seeking Alpha

Dollar Tree to acquire Family Dollar for $8.5B

  • Dollar Tree (NASDAQ:DLTR) is buying rival Family Dollar (NYSE:FDO) in a cash-and-stock deal valued at about $8.5B.
  • The value of the transaction is priced at $74.50 per share, a 22.8% premium over Family Dollar's closing price as of July 25, 2014. Stockholders of Family Dollar will receive $59.60 in cash and the equivalent of $14.90 in shares of Dollar Tree for each share they own.
  • Unanimously approved by the boards of directors of both companies, the deal is expected to close by early 2015.
  • DLTR +2.6%, FDO +21.2% premarket
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Comments (8)
  • psychological-dividends
    , contributor
    Comments (816) | Send Message
     
    Well I'm sure short term financiers like Icahn did well.

     

    But retail mergers are questionable sometimes, we'll see the result.
    28 Jul 2014, 06:59 AM Reply Like
  • Raj Mehta
    , contributor
    Comments (680) | Send Message
     
    Does this mean no dividend for FDO investors?
    28 Jul 2014, 08:39 AM Reply Like
  • Krakin
    , contributor
    Comments (82) | Send Message
     
    Think of the other things they could have gotten for 8.5 bil.
    28 Jul 2014, 08:43 AM Reply Like
  • positivethoughts
    , contributor
    Comments (2016) | Send Message
     
    Dollarama will be hit by this news.
    28 Jul 2014, 10:50 AM Reply Like
  • Ted Fischer
    , contributor
    Comments (2879) | Send Message
     
    Rosy projections, but reality bites. i have a feeling this won't end well.
    28 Jul 2014, 10:57 AM Reply Like
  • psychological-dividends
    , contributor
    Comments (816) | Send Message
     
    I just can't help but wonder if all these mergers are going to end well..Or will we beg for splitups down the road?

     

    Management promises of synergy can overestimate synergies, and shareholders may want breakups down the road.
    28 Jul 2014, 01:01 PM Reply Like
  • Ted Fischer
    , contributor
    Comments (2879) | Send Message
     
    This is a natural merger, a bit different from Microsoft buying Nokia. They will presumably integrate their operations and eventually drop one of the names. Still doesn't mean it will end well. If you are struggling to stay afloat, does it really help to grab an anchor?
    28 Jul 2014, 01:02 PM Reply Like
  • Ford289HiPo
    , contributor
    Comments (674) | Send Message
     
    So.....
    will Dollar Tree be reclaiming all the Family Dollar stores put out of business by competition from Dollar General, or will those empty buildings just remain as a blight?
    28 Jul 2014, 01:09 PM Reply Like
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