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Monday, July 28, 2014

Dollar Tree Buys Family Dollar

Dollar Tree is buying rival discount store Family Dollar in a cash-and-stock deal valued at about $8.5 billion.

NBC says the deal comes amid pressure on Family Dollar by the activist investor Carl C. Icahn, who urged the company last month to explore a sale of itself. But Family Dollar said in a statement that it had been exploring strategic options since the winter.

Under the terms of Monday’s deal, Dollar Tree will pay $74.50 for each share of Family Dollar. The bid is made up of $59.60 a share in cash and Dollar Tree stock worth about $14.90. Including debt, the deal values the target company at about $9.2 billion. The bid represents a premium of nearly 23 percent to Family Dollar’s closing price on Friday.

There’s no word yet on whether Dollar Tree will convert the Bradford Family Dollar in Union Square into a Dollar Tree.

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