Reference no: EM132481994

Case Synopsis

The case is set in Spring 2015, when Dollar General's CEO and chairman Rick Dreiling was looking ahead to retiring at year's end but could not help but revisit some of the key decisions he and the rest of the board has made in their pursuit of Family Dollar. In July 2014, Family Dollar (FDO) announced a merger agreement with Dollar Tree (DLTR), although Dollar General (DG) had held talks with Family Dollar as early as 2013 and offered $4 per share more than Dollar Tree. Dollar Tree believed that Family Dollar had been the right competitor to buy as a merger would have created substantial value for shareholders. Dollar General was also confident that its board had fulfilled its duties to its shareholders during the bidding process, however, it was less certain whether this was also true for Family Dollar's board.

Case study learning objectives

Question 1.) Evaluate the best target for a potential merger/acquisition through the use of ratios that demonstrate how business strategy and performance are reflected in financials;

Question 2.) Evaluate the respective corporate governance practices of two boards in carrying out their fiduciary duties of care, loyalty, and candor tot their shareholders; and

Question 3.) Evaluate the tension between resolving social issues to accomplish a strategically attractive acquisition and selecting and appointing the right CEO for the company at that time.