Dive Brief:

• Discount variety-store retailer Dollar Tree Inc., based in Chesapeake, VA, will acquire Charlotte, NC-based Family Dollar Stores Inc. for $8.5 billion in stock and cash, the companies said Monday.

• Dollar Tree will have more than 13,000 stores in the U.S. and Canada once the companies are combined. There’s no word on whether or how many stores might be closed.

• The deal was approved unanimously by both boards of directors, but will have to be approved by Family Dollar’s shareholders.

Dive Insight:

Activist investor Carl Icahn has been pushing for a deal like this since he acquired a 9.39% stake in struggling Family Dollar earlier this year. Rival discount retailer Goodlettsville, TN-based Dollar General was considered a likely suitor until news of CEO Rick Dreiling’s retirement next year. This presumably scratches Icahn’s itch, and gives Dollar Tree a physical store presence in the U.S. and Canada that rivals Wal-Mart Stores.