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From Antitrust Law Daily, July 6, 2015

Seventeen state attorneys general require divestment of Family Dollar stores

By Greg Hammond, J.D.

Working in tandem with the FTC, a group of 17 state attorneys general filed a proposed consent judgment on July 2, settling claims that Dollar Tree, Inc.’s proposed $9.2 billion acquisition of Family Dollar Stores, Inc. would likely be anticompetitive. The proposed consent judgment requires the divestment of 330 Family Dollar stores (State of Florida v. Dollar Tree, Inc., July 2, 2015).

The attorneys general for Florida, Maine, Missouri, Alabama, Indiana, Iowa, Maryland, Massachusetts, Mississippi, Nebraska, Oklahoma, Pennsylvania, Tennessee, Vermont, Virginia, Utah, and West Virginia filed their complaint and proposed consent order on the same day the FTC announced its settlement with Dollar Tree and Family Dollar, requiring certain Family Dollar stores to be sold to private equity firm Sycamore Partners.

Specifically, the complaint—which was filed in the federal district court in Washington, D.C.—claims the proposed acquisition would substantially lessen competition in numerous markets by: (1) eliminating direct and substantial competition between Dollar Tree and Family Dollar; and (2) increasing the likelihood that Dollar Tree will unilaterally exercise market power. This, according to the complaint, would violate Section 7 of the Clayton Act and each state’s applicable antitrust and consumer protection laws. The attorneys general sought permanent injunction to prevent the merger, along with costs and attorney fees.

The proposed consent judgment requires that Family Dollar and Dollar Tree divest the assets identified in the FTC’s Agreement Containing Consent Orders, including 330 Family Dollar stores, to Sycamore Partners.

The agreement also requires the defendants to pay over $865,000 to reimburse the costs and fees of the Offices of Attorneys General of the plaintiff states.

“These stores are located in both small towns and in our larger cities and suburbs,” stated Maine Attorney General Janet Mills. “We wanted to be sure that in areas where these stores were near each other that there would still be competition to offer the best prices and merchandise.”

The case number is 1:15-cv-01052.

Companies: Dollar Tree, Inc.; Family Dollar Stores, Inc.

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