(Reuters) – Dollar Tree Inc agreed to buy rival discount chain Family Dollar Stores Inc for $8.5 billion to fend off growing competition from Wal-Mart Stores Inc and fellow discounter Dollar General Corp .

Dollar stores have struggled in a weak U.S. economy as Wal-Mart and other large retail chains chase penny-pinching consumers by offering more items priced at $1 or less.

Read more: http://www.chicagotribune.com/business/sns-rt-us-family-dollar-st-offer-20140728,0,927953.story#ixzz38r0lWjdI