Dollar Tree to sell Family Dollar for about $1 billion

(NBC, KYMA/KECY) - Dollar Tree has announced it is selling its struggling Family Dollar business for about $1 billion to a consortium of private-equity investors.

The news comes after a nearly year-long search for potential buyers for the discount-store chain.

The 66-year-old business, which Dollar Tree bought in 2015 for about $9 billion, has been struggling due to competition from big-box and online retailers.

Shares of Dollar Tree were up 6% in premarket trading after the news of the sale to Brigade Capital Management and Macellum Capital Management.

The Family Dollar chain has been hit recently by pared back spending in the face of higher inflation.

The company announced last year that about 900 Family Dollar locations would be closed in a cost cutting effort.

Dollar Tree expects the sale to close in about 90 days, with the Family Dollar chain retaining its headquarters in Chesapeake, Virginia.