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Dollar For Dollar: Discount Stores Merge Under One Family Tree

One dollar plus another dollar equaled $8.5 billion on Monday. That's after Dollar Tree said it will buy rival discount store Family Dollar in a cash-and-stock deal valued at that amount. Customers for bargain stores have been among the hardest hit by the recession because of job instability. Family Dollar struggled and attempted to reinvigorate sales by lowering prices on almost 1,000 basic items. It cut some jobs and shuttered under-performing stores, but last month investor Carl Icahn urged Family Dollar to put itself up for sale. Dollar Tree CEO Bob Sasser said that the deal will give Dollar Tree more than 13,000 stores in the U.S. and Canada -- that is nearly three times as many stores as Wal-Mart Stores. 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. Dollar Tree stores sell products for $1 or less, while Family Dollar's pricing is much broader.

Dollar Tree's $8.5 billion bid for rival Family Dollar 2:05

- The Associated Press