Discount retailer Dollar Tree said Tuesday it expects to be able to complete its purchase of Matthews-based Family Dollar in May, and said it will have to sell about 340 Family Dollar locations to close the deal.
According to a Dollar Tree securities filing, the deal’s timing is dependent on “certain factors beyond the company’s control,” including approval from the Federal Trade Commission.
Dollar Tree said the FTC has “substantially completed” its review of the $8.5 billion acquisition and has identified 340 stores that it wants the company to divest in order to preserve competition for consumers. Dollar Tree said all or almost all of those stores will be Family Dollar locations, and the stores have about $47.4 million in operating income.
The Virginia-based 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 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, and Family Dollar shareholders approved the Dollar Tree offer in January.
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.
Observer reporter Katherine Peralta contributed.