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Dollar stores combine: Dollar Tree buying Family Dollar for $8.5 billion

Dollar Tree buys huge rival for $8.5 billion.
Dollar Tree buys huge rival for $8.5 billion.
Louisiana Record

Dollar stores have now combined as one has bought the other, and it was for much more than just a simple dollar. ABC News reported on July 28, 2014, that Dollar Tree has paid the whopping sum of $8.5 billion to purchase rival discount store Family Dollar in a deal that includes stock and cash.

Both companies put together the total value of the deal at more than $9 billion when debt, stock, and other costs are all added up.

SEE: Dollar Store stripper - YouTube video captures extremely racist rant in New York

Those that were stockholders of Family Dollar Stores will be paid $59.60 in cash and the equivalent of $14.90 in share of Dollar Tree for every share they own. In total, the value of the transaction was placed at $74.50 per share.

Yahoo News reported that Family Dollar has indeed struggled during the recession due to job instability, and they just haven't been able to get sales going again even though they've lowered the prices of almost 1,000 items. Jobs were even cut and underperforming Family Dollar stores were closed.

SEE: Family Dollar job cuts - About 370 stores will be closed by company

With the dollar stores combined, it gives Dollar Tree more than 13,000 stores in the United States and Canada. Believe it or not, that's actually close to three times as many stores as Wal-Mart Stores Inc. even though Wal-Mart stores are much larger.

Dollar Tree CEO Bob Sasser didn't state if any Dollar Tree or Family Dollar stores are going to close.

The main difference now that the stores have combined is that Family Dollar didn't sell everything for just $1. Their price range was low, but varied for different items. Dollar Tree sells all of its products for $1 or less.

Family Dollar will continue to operate under its brand even though it has been purchased by Dollar Tree.

The dollar store merger has been unanimously approved by both companies. The deal is expected to close by early next year.