Dollar Tree to Buy Family Dollar for $8.5B Combined chain will have triple the stores of Walmart By Newser Editors and Wire Services Posted Jul 28, 2014 6:43 AM CDT 15 comments Comments A Dollar Tree Store in Barre, Vt., is seen Monday, Feb. 8, 2010. (AP Photo/Toby Talbot) (Newser) – Dollar Tree is buying rival discount store Family Dollar in a cash-and-stock deal valued at about $8.5 billion. Dollar Tree CEO Bob Sasser says the deal will give Dollar Tree more than 13,000 stores in the US and Canada. That is nearly three times as many stores as Walmart, though the Waltons' behemoth still has greater square footage. The combined Dollar Tree-Family Dollar chain will have sales of more than $18 billion and Sasser says that the transaction will create a more diverse company with an enhanced geographic reach. The Family Dollar brand will continue to operate. Stockholders of Family Dollar Stores will receive $59.60 in cash and the equivalent of $14.90 in shares of Dollar Tree for each share they own. The companies put the value of the transaction at $74.50 per share, which is an approximately 23% premium to Family Dollar's Friday closing price of $60.66. Core customers for bargain stores and major retailers like Walmart have been among the hardest hit by the recession and its aftermath because of job instability. Family Dollar has struggled, lowering prices, cutting jobs, and closing some stores. The company had been conducting a strategic review since winter, and investor Carl Icahn urged Family Dollar last month to put itself up for sale.