(REUTERS) – Some 20 state attorneys general have joined the federal antitrust investigation of competing bids by Dollar General and Dollar Tree to buy Family Dollar Stores, a development that potentially complicates the companies’ efforts to win U.S. approval for a deal.
The attorneys general concern focuses on the likelihood that the loss of one of the chains would lead to higher prices for discount store customers, many of whom are poor, said two sources who spoke privately because they were not authorized to speak to reporters.
Florida is a member of the multi-state group, which joined the Federal Trade Commission to determine if the deals were legal under antitrust law, according to Whitney Ray, spokesman for Attorney General Pam Bondi.
The presence of the state attorneys general gives the FTC additional lawyers to look at the case, much-needed knowledge of how the merging companies function in the state and how the deal would affect a state’s consumers, said Allen Grunes, an antitrust attorney with the Konkurrenz Group in Washington, DC.
“There are times where federal government wants to do one remedy and you have a state or two who believe that there should be more done in their state. They at times will negotiate additional divestitures,” said Grunes.
Family Dollar, which has 8,100 discount stores in 46 states, has been targeted for a takeover by both Dollar Tree, which has 5,282 stores in 48 states, and by Dollar General, which is the big dog in discount retailing with 11,000 stores in 40 states.
Family Dollar reported a 47 percent drop in quarterly profit on Thursday as margins fell due to higher discounting. Net income fell to $41.4 million, or 36 cents per share, in the fiscal first quarter ended Nov. 29, from $78 million, or 68 cents per share, a year earlier.