Dollar General Corp. (DG) takes lead on Dollar Tree, Inc (DLTR) with a $9 billion bid for Family Dollar Stores Inc (FDO)

In a series of events associated with Family Dollar Stores Inc (NYSE:FDO)’s acquisition, Dollar General Corp. (NYSE:DG) has entered the bidding war with Dollar Tree, Inc (NASDAQ:DLTR). Dollar General Corp. (NYSE:DG) offered nearly $9 billion for Family Dollar Stores Inc (NYSE:FDO) against $8.5 billion offered by Dollar Tree, Inc (NASDAQ:DLTR) last month.

According to the CEO of Dollar General Corp. (NYSE:DG), Rick Dreiling, the company was planning to acquire Family Dollar Stores Inc (NYSE:FDO) for a long time and even expressed its interest in combining business with the acquisition target. Family Dollar Stores Inc (NYSE:FDO) is one of the prime targets of Dollar General Corp. (NYSE:DG) and the company has been waiting for such an opportunity. He further added, “It’s all water under the bridge. We’re ready to move forward.” The soon to be retiring CEO has postponed his retirement to May 2016 to ensure proper integration between the two companies.

Dollar General Corp (DG)

One of the key reasons behind this acquisition move from Dollar General Corp. (NYSE:DG) is to ensure its supremacy in the dollar-store industry. It certainly cannot afford to let its primary rivals, Family Dollar Stores Inc (NYSE:FDO) and Dollar Tree, Inc (NASDAQ:DLTR), combine their resources and create a bigger threat. The Dollar-store industry is expecting serious competition with Wal-Mart Stores, Inc. (NYSE:WMT) planning to start a new smaller-stores format.

Dollar General Corp. (NYSE:DG) is a discount retailer known for its budget-merchandise in the United States. The company has a market of $19.45 billion with P/E ratio of 19.89 and EPS (ttm) of 3.23. Dollar General reported a net income of $222 million for its last quarter with EPS of $0.72 and the company reported net sale increase of 6.8% for the quarter.

This article has been written by Prakash Pandey and edited by Serkan Unal.

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