KKR unveils $7.3bn US retail buyout

The global firm has agreed to buy Tennessee discount retailer Dollar General, while it bids for UK health and beauty retailer Alliance Boots.

Global private equity firm Kohlberg Kravis Roberts has agreed to buy publicly traded US discount retailer Dollar General for approximately $7.3 billion (€5.5 billion).

The deal is expected to close in the third quarter of this year.

Based in Goodlettsville, Tennessee, Dollar General was founded in Scottsville, Kentucky in 1939. It is currently run by its chairman and chief executive officer David Perdue. The company has more than 8,000 stores throughout the US. Its products include food, snacks, health and beauty aids, cleaning supplies and housewares.

Shareholders will receive $22 per share in cash. That value is a 31 percent premium over the company’s $16.78 closing share price on March 9. It is also a 29 percent premium over its average closing share price during the previous 30 trading days, Dollar General said in a statement.

Goldman Sachs and Lehman Brothers are providing the debt financing for the transaction.

KKR has made a number of investments in the retail industry, including supermarkets, consumer drugstores and specialty retail. The firm acquired Wayne, New Jersey-based toy retailer Toys “R” Us for $11.3 billion in 2005.

KKR is also preparing a potential bid worth £10 billion ($19 billion) for Alliance Boots, a UK health and beauty retailer. The firm approached the company last week about a possible buyout.