Dollar General and Dollar Tree trade barbs over Family Dollar

Goodlettsville, Tenn. — Dollar General Corp. and Dollar Tree engaged in a verbal war on Friday as they both seek to acquire Family Dollar.



In a news release, Dollar Tree said Dollar General's bid "may ultimately fail" because the Federal Trade Commission may require it to sell more than the 1,500 stores the retailer has said it is willing to let go of.



"Even if Dollar General is able to negotiate an acceptable divestiture number with the FTC, Dollar General may be unable to find and reach an agreement with an independent divestiture buyer or buyers who are acceptable to the FTC and willing to contractually commit to acquire so many stores on terms acceptable to Dollar General, the buyer or buyers, and the FTC," Dollar Tree said.



In return, Dollar General fired back its own salvo, bringing Walmart into the fray saying the giant discounter, not Family Dollar, is the primary driver regarding Dollar General’s strategic pricing decisions, and that Dollar General is not in direct completion with Dollar Tree in its pricing strategy.



"Dollar General is confident that its approach to strategic and pricing decisions is both correct and superior to that of Family Dollar and Dollar General has no intention of adopting a flawed strategy -- either now or after an acquisition ofFamily Dollar -- that it believes would impair its ability to compete with Walmart and lead to inferior financial performance," the company stated.



Moreover, Dollar General said it is in active discussions with the FTC regarding the possible need to divest stores in event of a merger and is making good progress.



Dollar General has submitted a $9.1 billion bid for, larger than the $8.5 billion bid offered by Family Dollar. However, both Family Dollar and Dollar Tree have said the Family Dollar bid is superior because Dollar General has competitive issues and would have a hard time receiving FTC approval of a merger.



In an earnings call Thursday, Dollar General CEO Rick Dreiling said, "We remain as committed as ever to this acquisition."