US footwear retailer Payless ShoeSource, Inc. and footwear company The Stride Rite Corporation have signed a definitive agreement under which Payless will acquire Stride Rite for approximately $800 million plus the assumption of Stride Rite debt. The all-cash offer of $20.50 per share represents a 32% premium over Stride Rite's average stock price over the past 90 days and was approved unanimously by the boards of directors of both companies.

With the closing of the transaction, Payless ShoeSource intends to rename the company Collective Brands, Inc. and, as a holding company, will operate three stand-alone business units—Payless stores, Stride Rite, and Collective Licensing International.

Matt Rubel, Payless' CEO and president, will serve as CEO of the new company.