Boston, MA 08/19/2014 (wallstreetpr) –According to reports, Dollar General Corp. (NYSE:DG) has offered as much as $8.95 billion to acquire Family Dollar Stores, Inc. (NYSE:FDO). The main objective of DG behind this huge offering is to strengthen its customer base in the retail segment.
Other Interested Parties:
FDO seems to be a sought after company in today’s retail dominant market. Other than DG, Dollar Tree Inc. also showed its interest in FDO with the same objective like Dollar General Corp. (NYSE:DG). As soon as Dollar General Corp. placed its bid that was higher than the one placed by its rival, the shares market showed a positive response. Company’s shares rose by 5.2% and touched $80.00 mark in regular trading. It was a clear indication that the investors liked DG’s bidding for Family Dollar Stores, Inc. (NYSE:FDO).
According to Joseph Feldman, analyst Telsey Advisory Group, “Both Dollar General Corp. (NYSE:DG) and Dollar Tree have a capacity to go higher than the price that they have offered.” Experts consider Dollar Stores a popular choice for middle and low-income segment US consumers. The current state of the economy in US is not that strong which makes Family Dollar Stores, Inc. (NYSE:FDO) an important choice for all the customers, as well as market leaders.
One thing that goes in favor of Family Dollar Stores, Inc. (NYSE:FDO) is the weak sales of retail giants like Wal-Mart Stores. It is going through a tough time now wherein a lot of job cuts and cost cutting are happening. These things have affected the sales of Wal-Mart Stores a big time. The biggest evidence of Family Dollar Stores, Inc. (NYSE:FDO)’s increasing popularity in US is that it has grown with a hefty rate of 45.7% between 2008-2013 and touched $48.2 billion mark. According to a study done by Euromonitor International, Family Dollar Stores, Inc. (NYSE:FDO)’s market is expected to grow at a rate of 18% in next five years. After the acquisition deal, the combined entity will have nearly 20,000 stores across 46 U.S. states and annual sales figures of $28 billion.