The two footwear retailers said Monday that Finish Line will acquire Genesco for $54.50 a share, or about $1.5 billion. The deal price represents a 9.9% premium to Genesco's closing price Friday, and a 38% premium over the stock's three-month average before March 9, when speculation began to emerge that the company may be bought out.

Industry giant Foot Locker (FL - commentary - Cramer's Take) twice made offers for Genesco, bidding $46 a share in April and then lifting that price to $51 a share. Genesco rejected both offers as not in the best interest of shareholders, but the company did put itself up for sale.

"Following a review of our strategic alternatives, we believe that this combination is in the best interests of our shareholders," said Genesco CEO Hal Pennington in a statement. "We have long admired The Finish Line's entrepreneurial spirit, and believe that together we will be able to leverage the combined companies' scale and talents."

The combined company's portfolio of retail concepts will include Finish Line, Man Alive and Paiva as well as Journeys, Johnston & Murphy, Hat World and Lids. The transaction is expected to close in the fall.

The deal comes at a tough time for the athletic-footwear industry. Genesco, Foot Locker and Finish Line all warned of much-weaker-than-expected results for their most recent quarters, hurt by soft demand in the U.S.