Dollar Tree, Family Dollar merger creates discount giant

​It took a whole load of its namesake — but Dollar Tree has announced it plans to acquire its larger rival Family Dollar. 

The $8.5 billion merger comes one month after Family Dollar's largest shareholder Carl Icahn, who has a more than nine percent stake in the company, pushed for its sale. 

The discount retailer has been struggling with increasing competition and fewer sales, forcing the closure of nearly 400 stores nationwide. 

But despite the closings, Dollar Tree will continue to operate both brands in the U.S. and Canada. The company says the move will reach a broader customer base.

"Family Dollar has multi-price points, ... and they tend to be more for Americans with low pay in cities or out in the country where there isn't a big store. Dollar Tree tends to be a dollar or less." 

The low price tag is also not the only thing that attracts most consumers to discount stores like Dollar Tree. As Businessweek points out, many in smaller households prefer small-scale shopping compared to larger wholesalers like Costco.

Find out what the merger means for  the stores' closest competition, Dollar General, in this Newsy video.

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