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Dollar Tree expects antitrust approval of Family Dollar deal, with few divestitures

In a potential boost for its attempt to acquire Matthews-based Family Dollar, the CEO of Dollar Tree said Thursday that he expects federal antitrust regulators will require the company to divest fewer of its stores to gain approval for the deal.

The Federal Trade Commission is weighing competing offers for Family Dollar: An $8.5 billion cash-and-stock offer from Dollar Tree and a $9.1 billion all-cash hostile offer from Dollar General. Family Dollar is trying to complete the Dollar Tree deal, which it agreed to, and fend off the Dollar General offer.

Shareholders are set to vote Dec. 23. Their decision will likely come down to what they think the FTC will do. Family Dollar believes the agency would block the Dollar General deal because of antitrust concerns.

Thursday, Dollar Tree CEO Bob Sasser told analysts during a conference call that he doesn’t think the FTC will require his company to sell as many of its stores as initially thought to close the deal. In July, when Dollar Tree first agreed to buy Family Dollar, the companies agreed to sell as many as 500 stores to secure regulatory approval.

“We are confident and expect the number of any divestitures will be less than the original divestiture commitment made in the July merger agreement,” said Sasser. Since July, in an effort to outflank Dollar General, Dollar Tree adopted a so-called “hell or high water” clause and agreed to sell as many stores as the FTC required.

Sasser’s comments could help Dollar Tree’s bid, because if the FTC required the company to sell a large number of stores, that would make the deal less attractive to shareholders.

Sasser also told analysts that the two companies are continuing their integration planning, as they sort out the details of how they would combine. If Dollar Tree completes its deal, Sasser would lead the combined company and Family Dollar CEO Howard Levine would stay on as a top executive and board member.

The New York Post, citing anonymous sources, reported Wednesday that the FTC could require Dollar General to divest 4,000 locations to close its acquisition of Family Dollar, which could make the deal unattractive. Dollar General didn’t respond directly but said Wednesday that it remains committed to buying Family Dollar and plans to issue an update on the FTC process before the Family Dollar shareholder vote.

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