Family Dollar Stores Inc's (NYSE:FDO) shareholders approved the discount retailer's deal to be bought by Dollar Tree Inc, (NYSE:DLTR) derailing a higher hostile offer from larger rival Dollar General Corp. (NYSE:DG)
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About 74 percent of Family Dollar's total outstanding shares were voted in favor of the deal on Thursday.
Reuters, citing people familiar with the matter, reported on Wednesday that Family Dollar's shareholders would likely support the Dollar Tree merger.
Family Dollar agreed to be bought by its smaller rival for $8.5 billion in cash and stock in July and later rejected a $9.1 billion all-cash offer from Dollar General.
The biggest U.S. discount retailer took its offer directly to shareholders in September after Family Dollar's board rejected its offer, citing antitrust concerns.
"Despite our best efforts... Family Dollar's lack of engagement and a contracted transaction timeline ultimately prevented us from completing this transaction," Dollar General CEO Rick Dreiling said in a statement.
The vote was a loss for Family Dollar shareholders as well as consumers, Dreiling said.
The deal, which still needs approval by the Federal Trade Commission, will vault Dollar Tree ahead of Dollar General to become North America's biggest discount retailer.
Family Dollar shares were up 1 percent at $76.35 in early trading. Dollar Tree shares were up 2.5 percent at $69.63, while Dollar General's shares were 3 percent higher at $69.21.
(Reporting by Sruthi Ramakrishnan in Bengaluru; Editing by Joyjeet Das)