Discount retail chain Dollar Tree has agreed to pay US$8.5 billion to acquire rival Family Dollar Stores in a move aimed at fending off growing competition from Wal-Mart Stores and Dollar General, Reuters reported.
Dollar stores have struggled amid a weak US economy as Wal-Mart and other large retail chains chase penny-pinching consumers by offering more items priced at US$1 or less, the report said.
The deal will give Dollar Tree more than 13,000 stores across the United States and Canada, putting the company ahead of Dollar General to become North America’s biggest discount retailer, with more than US$18 billion in annual sales.
Carl Icahn, Family Dollar’s largest shareholder, stands to make about US$200 million from the deal, a gain of about 32 percent on the price at which he bought his 9.4 percent stake in the company this year, according to the wire agency’s calculations.
“This acquisition will extend our reach to lower-income customers,” Dollar Tree chief executive Bob Sasser was quoted as saying.
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