Is Dollar General Owned by Walmart or China?

Dollar General is among the leading discount retailers in the U.S. and has over 17,000 stores spread across 47 states. Who owns Dollar General? Is it Walmart or China as many speculate?

Dollar General was founded in 1939 with a mission of “serving others.” The company’s business model revolves around setting up small neighborhood stores which carry fast-moving inventory. The company does not carry a humongous amount of inventory like large chains like Target and Walmart but limits it to those products that consumers want the most.

Walmart does not own Dollar General. The company hasn’t owned Dollar General in the past, and in all probability will not own it in the future as well. That said, Walmart does own a flurry of other companies. The most prominent ones are Sam’s Club in the U.S., Flipkart in India, and Massmart in Africa.

Notably, as part of its business strategy, Walmart has been trimming stakes in some of its international businesses. For instance, it has sold the majority stake in British supermarket chain Asda and Japanese supermarket chain Seiyu. It has also discontinued Jet, for which it had paid $3 billion in 2016.

Dollar General is not owned by China. However, the company buys a large portion of its merchandise from China. Its competitor Dollar Tree also buys a large portion of its goods from China. That’s not surprising, as China is the largest supplier of low-cost goods that companies like Dollar General sell.

Dollar General started as a family-owned business. It subsequently went public in 1968. The company continued to expand rapidly after the IPO and its sales and profitability increased gradually.

In 2007, private equity giant KKR acquired Dollar General for $22 per share, which was a 31 percent premium over then closing prices. The deal was valued at $6.9 billion and KKR also assumed $380 million debt of Dollar General. Goldman Sachs affiliates and Citigroup also participated in the acquisition, though KKR held most of the stake.

In 2009, KKR took Dollar General public again. The company kept the IPO price range between $21-$23 but had to eventually price the shares at $21, which was at the low end of the price range.

KKR offered 11.4 million shares in the IPO and held 89.5 percent of the company after the IPO. In 2013, both Goldman Sachs and KKR fully exited Dollar General. The deal was made at roughly three times the price at which Dollar General went public in 2009.

Since Dollar General is a publicly-traded company, it is owned by the stockholders. T. Rowe Price is the largest investor in Dollar General and owns around an 8.1 percent stake. The Vanguard Group is a close second and owns around 7.9 percent of Dollar General.

Capital World Investors, BlackRock, and State Street Global Advisors are the other top three investors in that order and own 6.8 percent, 4.8 percent, and 4.4 percent stakes, respectively, in Dollar General.

Overall, institutions own almost the entire stake in Dollar General. According to the data compiled by Fidelity, Dollar General’s institutional stock ownership is 55.4 percent while institutional mutual fund ownership is 39.5 percent. Mutual funds own another 4.5 percent while insiders hold 0.3 percent. The retail ownership in Dollar General is only 1.3 percent, which is much lower than the average retail holding in U.S. stocks.