The Family Dollar Takeover Fight: What's at Stake

In a season marked by heavy merger-and-acquisition activity, few takeover contests have matched the intensity of the bidding for Family Dollar Stores. While it’s not quite Game of Thrones, the battle between Dollar General and Dollar Tree for control of the North Carolina-based discounter has the kind of intrigue and promise of riches that have turned the saga of the warring houses of the Seven Kingdoms into must-see television.

At issue is who will dominate lower-income and small-town discount retailing in the U.S. now that Wal-Mart Stores has moved more upscale. “It’s one of the best opportunities in retail,” says Edward Jones analyst Brian Yarbrough. “There are a lot of small, rural markets that can’t support a giant Target or Wal-Mart,” whose largest stores can exceed 170,000 square feet, “but can support a 7,500-square-foot dollar store.”