NEW YORK (TheStreet) -- Dollar General Corp. (DG) may have to divest more than 4,000 stores in order to gain the Federal Trade Commission's approval for its acquisition of Family Dollar Stores Inc. (FDO) , sources told the New York Post.
Dollar General has said previously that it was willing to sell 1,500 stores in order to gain regulatory approval in order to purchase its competitor.
The $9.1 billion merger is currently stalled as the FTC is concerned the two discount store retailers are mainly in competition with one another and not with other drug stores and supermarkets, sources told the Post.
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Dollar General submitted papers to the FTC stating rival dollar stores are its main competition, the Post reports.
"The question is whether the [vastly increased] number of divestitures will allow [Dollar General's] deal to work financially," sources told the Post.
It could take up to six months to get the FTC to change its mind regarding which retailers are the company's biggest competition. Dollar Tree wants a vote on the merger by Dec. 31, when its offer for Family Dollar will expire, the Post added.
Separately, TheStreet Ratings team rates DOLLAR GENERAL CORP as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation: