Dollar General Corp. (NYSE:DG) is nearing the acquisition of Family Dollar Stores, Inc. (NYSE:FDO). Family Dollar acquisition in the retail space has been a long stretched story since the mid of 2014, with Dollar Tree, Inc. (NASDAQ:DLTR) supposedly made efforts to acquired Family Dollar first, which did not materialize. Then entered the fray was Dollar General Corp. (NYSE:DG) with a higher valuation of more than $9 billion. This again got some attention from Federal regulators. MKM Partners Managing Director, Patrick Mckeever talked on CNBC about this M&A.
“Yeah, it is certainly a big deal. If Dollar General were to acquire Family Dollar, it will be on the north of the $9 billion merger. It would be a company with 20,000 stores and about $30 billion in revenues. So it will be a pretty big deal in the retail space and its certainly what investors are looking toward, more so than this morning’s third quarter results. I mean, they will certainly be important, but the other thing is more important, the potential merger here,” Mckeever said about the potential merger of Dollar General Corp. (NYSE:DG) and Family Dollar Stores, Inc. (NYSE:FDO).
Dollar General Corp. (NYSE:DG) is all set to reveal its quarter earnings reports just before the bell on Thursday, but McKeever feels that the potential merger of Dollar General Corp. (NYSE:DG) and Family Dollar Stores, Inc. (NYSE:FDO) is more important to investors than the quarter results.
The reducing oil prices have given a lot of savings for consumers, where a consumer can save a lot in gas stations. But what will be the story behind the retailers like Dollar stores who has these stations? Will they realize any profits with reduced oil prices? McKeever said that some stores have already started seeing benefits from the lowering oil prices. He feels that low end consumers benefit a lot, but it might take time for retailers to gain some benefit out of it.
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