Family Dollar Stores, Inc. (NYSE:FDO) shareholders voted in favor of the deal allowing the merger of the company with Dollar Tree, Inc. (NASDAQ:DLTR), creating a new competitive dynamic for the value retailing industry in the U.S. Howard Levine, Family Dollar chairman and CEO, was pleased with the outcome of the vote as 74% of the shares were voted in favor of the proposal.
The new entity would be in better position to compete with the industry leader Dollar General Corp. (NYSE:DG) that operates nearly 12,000 stores. The deal is expected to close in March, following which a combined company will have more than 14,000 stores and compelling growth opportunities with annual sales expected to surpass $19 billion in aggregate.
Family Dollar Stores, Inc. (NYSE:FDO) operated 8,101 stores supported by 11 distribution centers at the end of 1Q15. Dollar Tree operated 5,077 stores supported by 10 distribution centers at the end of October 2014. While food and consumable categories contribute to three-fourths of Family Dollar’s sales, they also contribute about half of Dollar Tree’s sales.
Amid regulatory hurdles, Dollar General Corp. (NYSE:DG) did not succeed to acquire Family Dollar despite a strong $80 a share offer compared to Dollar Tree’s $76.85 a share offer. Dollar General faced issues about the number of store divestitures to secure regulatory approval to resolve the issues of overlapping footprint with Family Dollar.
Levine said, the Board of Directors and Management of Family Dollar Stores, Inc. (NYSE:FDO) worked diligently to secure the best interests of all of the stockholders. He also appreciated the company’s committed employees and said that the company is looking forward to complete the transaction with Dollar Tree. He expressed that the combination would create exciting opportunities for Family Dollar’s stockholders, team members and customers.
Bob Sasser, Dollar Tree, Inc. (NASDAQ:DLTR)’s CEO, said that the company will soon operate more than 13,000 stores across 48 states and five Canadian provinces, significantly enhancing geographic footprint and business diversity.