NEW YORK (TheStreet) -- Dollar General (DG) shares are up 9.8% to $63.10 in pre-market trading on Monday after announcing that it was offering a bid of about $8.95 billion, or $78.50 per share, for fellow dollar store retailer Family Dollar (FDO) .
Dollar General outbid rival Dollar Tree (DLTR) , which had previously offered $8.5 billion, or $74.50 per share, for the company last month.
Dollar General, which has 11,000 stores across the country, said that the merger would provide between $550 million and $600 million in savings through profit synergies three years after the deal closed if Family Dollar accepts.
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TheStreet Ratings team rates DOLLAR GENERAL CORP as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate DOLLAR GENERAL CORP (DG) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share, increase in net income, notable return on equity and good cash flow from operations. We feel these strengths outweigh the fact that the company shows low profit margins."