Merger Could Clear the Air in Dollar Store Sector

RESTON, VA—Given its announcement earlier this year that it would close some 300 locations—admittedly, a small percentage of its total—and the likes of Carl Icahn urging the company to put itself up for sale, a major transaction of some kind involving Family Dollar Stores had been expected for some time, net lease experts at Calkain Cos. and the Boulder Group tell GlobeSt.com. However, the one that was announced on Monday—a merger with smaller competitor Dollar Tree in a deal worth $9.2 billion in stock and debt—wasn’t necessarily what everyone had anticipated.

“I’m not sure that everyone who was looking at tea leaves thought that Dollar Tree would be the acquirer,” Richard Murphy, managing director at Reston, VA-based Calkain, tells GlobeSt.com. “But clearly, people knew that Family Dollar was in play, and something was afoot.” A more likely acquisition scenario, though, would have involved either a large private equity firm or even the leading player in the dollar-store sector, Dollar General.