A Tennessee-based company that operates rural hospitals said Monday that it has agreed to buy Triad Hospitals Inc. of Plano for $6.8 billion, topping a private-equity group's bid and creating the nation's largest publicly traded hospital company.

Community Health Systems Inc. of Franklin, Tenn., will pay $54 per share in cash, $3.75 a share higher than an earlier offer from CCMP Capital Advisors and Goldman Sachs Capital Partners, the two hospital companies said.

The combined company will own or operate 130 hospitals in 28 states. In Texas, Triad has nine hospitals and one under construction; Community has eight. All are in rural towns, midsize cities or suburbs.

"This is a strategic growth opportunity for us," Wayne Smith, Community Health Systems chairman, president and chief executive, said in a conference call to analysts. "Triad has excellent hospital facilities with strong medical staffs."

Wall Street remains skeptical of Community Health Systems' strategy, however.

The company's shares lost $2.02 to close at $34.78 Monday. Triad's rose $2.59 to close at $51.95.

Both hospital companies have been leaders in an industry that's been hammered by weak admission numbers. Community Health Systems' revenue has grown an average of 21 percent annually in the last five years, and Triad's has averaged 15 percent.

Analysts said the merger represents an uncharacteristically bold move by Community's historically conservative management that will double the size of the company and extend its reach into larger markets in six additional states.

Community Health Systems is the smaller of the two companies, with a market value of $3.6 billion and revenue of $4.4 billion last year. Triad has a market value of $4.4 billion and reported revenue of $5.5 billion in 2006.

Until now, Community Health Systems has focused on rural communities where it was the only hospital, Frank Morgan of Jefferies & Co. Inc. said in a research note. This acquisition moves it into suburban markets, he said.

Sheryl Skolnick of CRT Capital Group said the merger "isn't a perfect fit, but it's not a bad one. I expect Community will capitalize on the two companies' synergy and move many of the Plano management operations to Tennessee."

Triad employs about 200 people at its Plano headquarters.

Mr. Smith told analysts that he sees $40 million to $50 million in savings from the merger, mainly from lower corporate overhead costs.

Asked if Triad's managers would join Community's, Mr. Smith said, "We don't know yet who's staying, but we're hopeful that we can work with them and that they can become part of our organization."

Mr. Smith said he expects a smooth transition.

"Triad is a well-run company in many respects, and both companies share core values," he said.

Triad said it paid a breakup fee to cancel its previous merger agreement with the private-equity group, though the company didn't disclose the amount.

Triad's stockholders must approve the deal with Community Health Systems. It's expected to close in the third quarter.

"I am proud of the value this transaction brings to our shareholders," Triad chairman and chief executive James Shelton said in a written statement.

Triad spokeswoman Pat Ball declined to comment further.

The $6.8 billion purchase price includes Community Health Systems' assuming $1.7 billion in Triad debt.

Community Health Systems said it has received financing commitments from Credit Suisse, Wachovia Capital Markets and their affiliates.

"Because the transaction will require Community to take on substantial debt, I wouldn't be surprised if the company slows down on its capital spending," Ms. Skolnick said. "I doubt we'll see the kind of spending we did at Triad."

Mr. Smith said it was too early to know whether Community would sell any hospitals to pay down its debt from the deal.

Kenneth Weakley of UBS Securities wrote in a note to clients that Community Health Systems will bring "dramatically stronger discipline" to Triad. He said he expects Triad's hospitals to fare better under Community Health Systems' management team.

Analysts also predicted that the combined company would have greater purchasing power and lower overhead.

Community Health Systems has typically acquired hospitals in nonurban markets with little or no competition, which allows it to charge top dollar. The combined company will operate the sole hospital in 65 percent of its markets.

Community Health Systems was founded in 1985 and taken private in 1996. Four years later, it went public again.

"Community is stepping out of its comfort zone with this deal, but it figured its options were to devour someone else or be devoured itself," Ms. Skolnick said.

"The company had no desire to be inside another private-equity firm."