Dollar Tree to buy Family Dollar for $8.5 billion

Dollar Tree is buying Family Dollar in a deal estimated at $8.5 billion, The Associated Press reports.

The AP reports that after the deal, Dollar Tree will have more than 13,000 stores across the United States. The two companies are among the biggest discount chains in the country.

The deal, approved by the companies' boards of directors, will give Family Dollar $74.50 per share. Dollar Tree will pay $59.60 per share in cash, and the rest will be in shares.

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"This is a transformational opportunity," Bob Sasser, Dollar Tree's Chief Executive Officer, said in a statement. "This acquisition will extend our reach to lower-income customers and strengthen and diversify our store footprint."

Dollar Tree expects that the deal will be closed by early 2015.