By Alabama Public Radio
Dothan, AL – An Alabama company has announced it will merge with a former competitor. Dothan-based Movie Gallery says it has reached an agreement to purchase Hollywood Entertainment. The deal is worth 850 million dollars and includes assumption of 350 million dollars in debt. Movie Gallery will buy all of Hollywood Entertainment's outstanding shares for 13 dollars - 25 cents each. The deal is expected to close sometime during the second quarter. The merger would combine the nation's number two and number three video rental chains. Hollywood Entertainment operates more than two thousand stores. The new company would have about 45-hundred stores in the U-S, Canada and Mexico.