A number of stores are likely to be sold, Mr. Lacy said.

While insiders said discussions between the companies had been under way for months, the deal was put together in a rush over the last couple of weeks.

Mr. Lampert said his goal was to make all the stores in the combined empire profitable. "I don't think any retailer should aspire to have its real estate be worth more than its operating business," he said.

Sears achieved higher sales in its stores compared with Kmart, calling this a reason to switch hundreds of Kmarts to the Sears name.

"If we ever achieve that level of productivity in Kmart stores, whether as Kmarts or as Sears, you're talking about an $8 billion opportunity," Mr. Lampert said.

Others saw the deal as having far less to do with what is sold in the stores than with the ground beneath them. "This appears to be a heavily real estate-oriented deal, not a merchandise-oriented one," said Eugene Fram, a marketing professor at the Rochester Institute of Technology. "You really need star power in this case. Both of these companies are faltering, and if you take a look at the size of the new company, it's still only 20 percent of Wal-Mart in terms of sales."

The sale of Sears also appears to spell opportunity for Martha Stewart's company, Martha Stewart Living Omnimedia, which sells a line of products exclusively through Kmart in the United States. In a statement, its new chief executive, Susan Lyne, said the merger "will create for us a broader retail presence that reaches millions of new consumers." Its stock rose $1.09, to $18.49.

Mr. Lampert, an often maverick investor from Greenwich, Conn., bought up chunks of Kmart debt while it was operating under bankruptcy protection two years ago. With an investment estimated at $700 million to $1 billion, he won control of the emerging company, and pushed it to close stores and make other strategic changes during and after its reorganization.