Dollar Tree 2014 Annual Report Download - page 31

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Combining the two companies may be more difficult, costly or time consuming than expected and the anticipated benefits,
synergies and cost savings of the proposed merger may not be realized, including as a result of the challenges Family
Dollar has been recently experiencing as a stand-alone company.
We and Family Dollar have operated and, until the completion of the proposed merger, will continue to operate,
independently. The success of the proposed merger, including anticipated benefits, synergies and cost savings, will depend, in
part, on our ability to successfully combine and integrate the businesses of our company and Family Dollar. It is possible that
the pendency of the merger and/or the integration process could result in the loss of key employees, higher than expected
costs, litigation relating to the proposed merger, diversion of management attention of both Dollar Tree and Family Dollar,
increased competition, the disruption of either company’s ongoing businesses or inconsistencies in standards, controls,
procedures and policies that adversely affect the combined company’s ability to maintain relationships with customers,
vendors and employees or to achieve the anticipated benefits and cost savings of the proposed merger. If we experience
difficulties with the integration process, the anticipated benefits of the proposed merger may not be realized fully or at all, or
may take longer to realize than expected. Family Dollar’s first quarter of fiscal year 2015 experienced increased pressures on
merchandise margin, deleveraging of expenses and increased professional fees, and such conditions may continue in fiscal
2015. Moreover, Family Dollar has recently experienced turnover in its corporate office and may continue to do so during the
pendency of the proposed merger and/or integration process. Each of these factors, among others, could negatively impact the
actual benefits realized in the merger. Furthermore, integration efforts between the two companies will also divert
management attention and resources. These integration matters could have an adverse effect on us during this transition
period and for an undetermined period after completion of the merger on the combined company. In addition, the actual cost
savings of the proposed merger could be less than anticipated.
Failure to complete the proposed merger could negatively impact our stock price and our future business and
financial results.
If the proposed Family Dollar merger is not completed for any reason, we would be subject to a number of risks,
including the following:
• We will incur substantial expenses and costs related to the proposed merger, whether or not it is
consummated, including legal, accounting and advisory fees;
• Matters relating to the proposed merger (including integration planning) will require substantial commitments
of time and resources by our management, which would otherwise have been devoted to day-to-day
operations and other potentially advantageous business opportunities or plans that may have been beneficial
to us, without realizing any of the expected benefits of the proposed merger; and
• Failure to consummate the proposed merger may result in negative reactions from the financial markets or
from our customers, vendors and employees.
If the proposed merger is not completed, these risks may materialize and could have a material adverse effect on our
stock price, business and cash flows, financial condition and results of operations.
We will incur significant transaction and acquisition-related costs in connection with the proposed merger.
We expect to incur a number of non-recurring costs associated with the proposed merger and combining the operations of
the two companies. The substantial majority of non-recurring expenses will be comprised of transaction and regulatory costs
related to the merger.
We also will incur transaction fees and costs related to formulating and implementing integration plans, including
facilities and systems consolidation costs and employment-related costs. We continue to assess the magnitude of these costs,
and additional unanticipated costs may be incurred in the proposed merger and the integration of the two companies’
businesses. Although we expect that the elimination of duplicative costs, as well as the realization of other efficiencies related
to the integration of the businesses, should allow us to offset integration-related costs over time, this net benefit may not be
achieved in the near term, or at all. See the risk factor entitled “Combining the two companies may be more difficult, costly or
time consuming than expected and the anticipated benefits, synergies and cost savings of the proposed merger may not be
realized, including as a result of the challenges Family Dollar has been recently experiencing as a stand-alone company”
above.