This week's business news is starting out with two billion-dollar acquisitions: Zillow and Dollar Tree announced Monday their respective purchases of Trulia and Family Dollar.
Zillow's deal with fellow online real estate company Trulia is worth $3.5 billion, and is expected to close next year, according to USA Today. As part of the agreement, both brands will still operate under their individual names, and Pete Flint, CEO of Trulia, will keep his position and report to Spencer Rascoff, CEO of Zillow.
"This is a tremendous opportunity to combine our resources and achieve even more impressive innovation that will benefit consumers and the real estate industry," Rascoff said.
Trulia's shareholders will receive 0.444 shares of common stock in Zillow for each share they hold, and will own close to one-third of the combined company, The Denver Post reported.
Seattle-based Zillow had 83 million unique users across mobile and online in June, while San-Francisco-based Trulia had 54 million unique across its websites and mobile apps in the same month.
Both companies expect the merger to provide greater ad sales, USA Today reported. Rascoff said in a call with analysts that this deal will let the two companies "go to our advertisers with one platform."
Dollar Tree is buying rival variety store chain Family Dollar in a cash-for-stock deal worth close to $8.5 billion, USA Today reported. Bob Sasser, CEO of Dollar Tree, referred to the acquisition as a "transformational opportunity."
"This acquisition will extend our reach to lower-income customers and strengthen and diversify our store footprint," he said.
Family Dollar will still operate as a separate brand, and Howard Levine, CEO of the company, will report to Sasser.
The deal will have Dollar Tree pay $74.50 for each share of Family Dollar, The New York Times reported. Both companies are looking to meet a goal of $300 million in annual cost savings by the end of the third year after the deal closes.
The deal is expected to close by early next year, and the combined company will have over 13,000 stores in 48 states and in Canada, as well as over $18 billion in revenue.
"Throughout our history, we have strived continuously to evolve and improve our business," Sasser said. "This acquisition, which enhances our footprint and diversifies our company, will enable us to build on that progression, and importantly, positions Dollar Tree for accelerated growth."
