Genesco, the company behind footwear names like the teenager-focused Journeys chain of stores and the Johnston & Murphy brand of shoes, said today that it had agreed to sell itself to a smaller retailer, the Finish Line, for $1.5 billion.

Finish Line, which runs its eponymous sportswear chain as well as the Man Alive and Paiva stores, will pay $54.50 a share in cash for Genesco, a 10-percent premium over Friday’s closing price of $49.50.

The deal, scheduled to close in the fall, will provide about $15 million to $20 million in cost savings beginning in the first year of combined operations, both companies said. With a market value of about $1.2 billion and more than 2,050 stores in the United States and Canada, Genesco dwarfs its acquirer, which has about $585 million and about 802 stores nationwide.

“This is a transforming event for our company,” the chief executive of Finish Line, Alan H. Cohen, said. “With Genesco, I feel Finish Line is better positioned to increase our scale.”

Genesco twice rebuffed overtures early this year from a larger rival Foot Locker, which had offered $1.2 billion and then $1.37 billion. Genesco later opened an auction and invited Foot Locker, but it declined to make another bid.

Shares in Genesco rose 8.1 percent to $53.61 in trading Monday, while those in Finish Line fell 3.1 percent to $12.24.

While Genesco will become a subsidiary of Finish Line, which is based in Indianapolis, it will maintain its operations in Nashville. Genesco’s chief executive, Hal N. Pennington, said he and his management team would stay on to advise Mr. Cohen during the transition.

Finish Line will finance the transaction with $11 million in cash and up to $1.6 billion in financing from an adviser, UBS.

Finish Line was also advised by the Peter J. Solomon Company, as well as the law firm Gibson Dunn & Crutcher. Genesco was advised by Goldman Sachs and Bass Berry & Simms.

(Published by The New York Times, June 18, 2007)