Dollar Tree will sell about 340 stores in Family Dollar deal, expects sale to close in May

IndustriesAssociated Press

Discount retailer Dollar Tree said Tuesday it expects to be able to complete its purchase of competitor Family Dollar in May, and said it will have to sell about 340 Family Dollar locations to close the deal.

Dollar Tree said the Federal Trade Commission is almost finished reviewing the $8.5 billion acquisition and has identified 340 stores that it wants the company to sell in order to preserve competition for consumers. Dollar Tree said all or almost all of those stores will be Family Dollar locations. It said the stores have about $47.4 million in operating income.

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The Chesapeake, Virginia, company said it is in talks with potential buyers for those stores. In total Dollar Tree has almost 5,300 stores and Family Dollar has about 8,100.

Dollar Tree offered to buy Family Dollar, of Matthews, North Carolina, in July. Another competitor, Dollar General, also tried to buy Family Dollar but was rebuffed. Family Dollar said it thought regulators would be less likely to approve that deal.

Dollar Tree sells all items for $1 or less, while Family Dollar and Dollar General carry more national brands and items that cost several dollars.

The FTC's review has lasted longer than the companies expected, as Dollar Tree had hoped to close the deal as early as March. The FTC also wants Dollar Tree to sell more stores than it originally planned. Dollar Tree had said it would need to divest about 300 stores.

Dollar Tree Inc. shares lost 56 cents to $80.02 in after-hours trading. Shares of Family Dollar Stores Inc. were unchanged at $79.13.