Pulte Homes
said it would buy Texas-based builder Centex for $1.3 billion in stock, against the backdrop of a troubled industry.

The deal, which Pulte said would create the largest U.S. homebuilder, calls for the exchange of 0.975 common shares of the company for each share of Centex, valuing the acquisition at $10.50 per share. The companies said that represented a premium of 32.6 percent over the stock's 20-day average price.

Pulte, which would take on $1.8 billion of Centex debt, will own about 68 percent of the combined company, it said in a news release. It said it would realize cost savings of about $350 million annually from the deal.

Based on current prices, the combined company would have a market capitalization of $4.1 billion, Pulte said.

Pulte Chief Executive Richard Dugas will be chairman and CEO of the combined company.

(Reporting by Christopher Kaufman; Editing by Lisa Von Ahn)