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.
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.