Dollar Tree is buying its larger rival for 23% more than Family Dollar's closing price last week, for a total value of $8.5 billion.
Dollar Tree plans to continue to operate both the Dollar Tree and Family Dollar brands. Dollar Tree stores sell all items for $1 or less and CEO Bob Sasser told investors Monday they will continue to do so. Family Dollar stores sells many items for more than $1 and will stay with that pricing policy as well.
Dollar Tree stores are found mainly in suburban areas. Family Dollar stores are primarily in either urban or rural locations.
Combined, the two chains have more than 13,000 stores. That's almost three times as many retail locations as Walmart which, as of June numbers, was 4,901. The Dollar Tree/Family Dollar reports a combined annual revenue of $18 billion compared to Walmart's reported annual revenue of around $473 billion.
The deal is expected to close early next year.