MATTHEWS, N.C. — If everything in its stores costs a buck, it will take 8.5 billion items sold for Dollar Tree stores to buy rival Family Dollar.
Dollar Tree is buying its larger rival for $74.50 a share in cash and stock, 23 percent more than Family Dollar’s closing price on Friday, for a total value of $8.5 billion.
Family Dollar is headquartered in Matthews, N.C. with the first store opening in Charlotte in 1959. There are 1,400 employees at their headquarters and 50,000 across the country.
Dollar Tree has 5,080 stores and annual revenue of $7.8 billion in its most recent fiscal year. Family Dollar has 8,200 stores and annual revenue of $10.4 billion.
The combined companies could overtake the leader in the dollar-store sector, Dollar General, which has more than 11,000 stores and revenue of $17.5 billion.
Dollar Tree plans to continue to operate both the Dollar Tree and Family Dollar brands after the merger is completed. It expects the deal to close early next year.
A big winner in the deal is activist investor Carl Icahn, who holds 9.4 percent of Family Dollar shares, according to sales tracker LionShares. Icahn acquired most of the shares in the past year.
Shares of the company shot up in June when Icahn disclosed his stake, but have given back most of the gains since. The stock is down nearly 6 percent for the year through Friday’s close.
Shares of Family Dollar soared on the news in pre-market trading.