| WASHINGTON, June 2
WASHINGTON, June 2 U.S. discount retailer Dollar
Express has filed a lawsuit accusing rival Family Dollar and its
parent company Dollar Tree Inc of driving it out of
business, the third government-required divestiture to fail in
Dollar Express was formed in 2015 when private equity group
Sycamore Partners II LP bought some 330 stores in 35 states from
Family Dollar and Dollar Tree. Family Dollar had to sell the
stores in order to win antitrust approval to merge with Dollar
In the lawsuit filed Thursday, Dollar Express accuses Dollar
Tree of using confidential information to open new shops near
the divested stores to drive them out of business.
It also accused Dollar Tree of putting underqualified and
inattentive store managers in divested stores.
"Dollar Express's damages, which include the lost
prospective value of the acquisition of the stores, may exceed
one-half billion dollars, with the ultimate amount of damages to
be determined at trial," Dollar Express said in its complaint.
Dollar Express in the lawsuit says these and other actions
lead to it obtaining Federal Trade Commission approval in April
to go out of business and sell its stores to Dollar General Corp
Dollar Tree did not respond to a request for comment.
U.S. regulators often insist on divestitures as a way of
protecting competition without having to file lawsuits to
prevent mergers that would lead to monopolies.
The FTC is reviewing divestitures that may allow Walgreens
Boots Alliance Inc to buy Rite Aid Corp.
Dollar Express marks the third divestiture to fail recently.
In 2015, Albertsons purchase of Safeway led to the sale of
168 stories to smaller rival Haggen, which filed for bankruptcy
In 2012, Hertz Global Holdings bought Dollar Thrifty and was
required to sell its Advantage Rent a Car brand. Advantage filed
for bankruptcy within months and is now owned by a Canadian
Chris Sagers, who teaches antitrust at Cleveland-Marshall
College of Law, said customers would be hurt if the companies
formed from divested assets fail.
"The agencies want to avoid suing to block. They don't want
to litigate merger challenges. Litigating these things is a huge
resource drain," he added. "Merger parties are well-heeled and
(Reporting by Diane Bartz; Editing by Lisa Shumaker)