NEW YORK (CNNMoney) -- If everything in its stores costs a buck, it will take 8.5 billion items sold for Dollar Tree stores to buy rival Family Dollar.
Dollar Tree is buying its larger rival for $74.50 a share in cash and stock, 23% more than Family Dollar's closing price on Friday, for a total value of $8.5 billion.
Dollar Tree has 5,080 stores and annual revenue of $7.8 billion in its most recent fiscal year. Family Dollar has 8,200 stores and annual revenue of $10.4 billion.
The combined companies could overtake the leader in the dollar-store sector, Dollar General, which has more than 11,000 stores and revenue of $17.5 billion.
A big winner in the deal is activist investor Carl Icahn, who holds 9.4% of Family Dollar shares, according to sales tracker LionShares. Icahn acquired most of the shares in the past year.
Shares of the company shot up in June when Icahn disclosed his stake, but have given back most of the gains since. The stock is down nearly 6% for the year through Friday's close.
Shares of Family Dollar soared on the news in premarket trading.
™ & © 2014 Cable News Network, Inc., a Time Warner Company. All rights reserved.
BrandsMart security changes after 2013 chaos
The holiday shopping season got off to a rough start at BrandsMart last Thanksgiving as crowds pushed their way into the store. The…
Rat shuts Boca restaurant for 2nd time
The restaurant's manager didn't want to comment, but the owner of Saquella Caffe did. He gave a surprisingly honest and candid…
Facebook privacy changes you need to look at
Have you noticed the changes on your Facebook page? The Consumer Watchdog is breaking down the changes and shows you what to look at to make…
Cruise refunds hard to get without insurance
The Consumer Watchdog shows you the steps you need to take to protect your next cruise.
Unemployment fraud frustrating employees
Millions of your tax dollars are paid to thieves each year. They're ripping off you and the government by filing fraudulent unemployment…