Dive Brief:
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Citing antitrust concerns, Family Dollar has been adamant about rejecting an offer by Dollar General Corp., despite its higher $9.1 billion bid compared to the $8.5 billion one it has accepted from Dollar Tree.
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A price study by Bloomberg Intelligence found that prices at a Family Dollar near a Dollar General store were lower than at another Family Dollar store in the area, away from any competition.
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That’s the kind of evidence that could lead the Federal Trade Commission to conduct an extensive antitrust investigation, which could derail any Family Dollar sale.
Dive Insight:
This limited study by Bloomberg Intelligence nevertheless bolsters Family Dollar’s contention that Dollar General’s higher bid is undermined by antitrust concerns, and therefore not worth it. Dollar General has downplayed that, even accusing Family Dollar’s CEO of acting out of concern for his own job, although it has added some terms to its offer that it says should allay any antitrust fears.
Dollar General hasn’t gone as far as Dollar Tree, though, which says it would divest itself of any stores deemed necessary to preserve the level of competition the Federal Trade Commission seeks.