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Discount chain Dollar Tree Inc will buy rival Family Dollar Stores Inc for about $8.5 billion, in a surprise deal that will help it fend off increasing competition from big-box retailers such as Wal-Mart Stores Inc . Dollar stores have struggled in a weak U.S. economy as Wal-Mart and other large retail chain chase penny-pinching consumers by offering more items priced at $1 or less. The deal will give Dollar Tree more than 13,000 stores across the United States and Canada, vaulting the company ahead of Dollar General Corp to become North America's biggest discount retailer. Family Dollar's sale is a big win for activist investor Carl Icahn, who has been urging the company to sell itself.