Family Dollar and Dollar Tree finally have reached a deal to merge for $8.5 billion. This merger comes after months of negotiations between Family Dollar, Dollar Tree and Dollar General.
Family Dollar and Dollar Tree originally came to an agreement last July, but Dollar General quickly stepped in with a higher offer. Interestingly, although Dollar General offered a higher price at $9.1 billion, Family Dollar chose to merge with Dollar Tree due to regulatory concerns. Family Dollar also said merging with Dollar General would require it to divest of 3,500 to 4,500 stores.
Although these negotiations between some of the biggest names in low-cost retail have been exciting news for the public, they were probably more anxiety-inducing for Dollar Tree. It’s not so fun to watch your competitor swoop in and nearly take your acquisition after you’ve worked hard to put together a deal.
This is another reason why private, not-for-sale transactions can be advantageous. You have less risk that your competitors will pursue the same deal because the company is not-for-sale and there are fewer chances that they’ll find out about it until the deal’s done.
Like many of our clients, you may choose not to publicly announce the acquisition. Keeping the deal under wraps helps you maintain stealth in the marketplace and guard your strategic plan.