(FORTUNE Magazine) – WHEN ALL THE SCREAMING AND shouting and light-bulb popping have died down, there are a few things we can safely say about Eddie Lampert's orchestrated purchase of Sears by Kmart. First and foremost, even if this marriage does work over the short to intermediate term, in no way does it threaten Wal-Mart or Target or Home Depot or Costco. Just as significantly, the Big Store Part II poses even less of a threat to next-generation hot retailers like Williams-Sonoma, H&M, and Bed Bath & Beyond. Yes, the new Sears will be plenty big--3,500 stores, about as many as Target and Home Depot combined--and it will have a few recognizable brands: Craftsman, Kenmore, Lands' End (all from Sears), and of course Martha, but that's just about it. Otherwise what you have here is a clumsy amalgamation with no buzz, tired locations, and declining same-store sales.

So what's it all about, Eddie? Good question. You could argue that mostly it's about Eddie Lampert moving pieces around the game board so that he and investors in his reported $9 billion hedge fund, ESL, can enjoy another one of those reported 29% yearly returns to shareholders it's now famous for. There's nothing wrong with that, as long as you don't get caught up in merger rhetoric about retailing synergies, economies of scale--both Sears and Kmart already had that--and taking on Wal-Mart. (When told about the merger, one Wal-Mart exec responded by asking, "Oh, are we being blamed for this too?") No, this much-hyped $11 billion deal--the same size as this year's Rouse/General Growth Properties deal, or did you miss that one?--is about lashing together two wallowing ships long enough to keep 'em afloat to squeeze some value out of them. (Or as one Wall Street wag said of the deal, "It's a suicide pact.")

On the other hand, squeezing out value is a strategy that Lampert has excelled at recently. In mid-November, Kmart was up eightfold in the 18 months after Lampert nursed it out of bankruptcy, to $109 a share. (It has since backed off to about $100.) Most of Lampert's alchemy in the case of the Big Red K has been turning what appeared to be backwater real estate into gold. He made quite the splash selling 68 Kmart stores to Home Depot and Sears recently for $847 million. That's about half the total number of stores Kmart owned (as opposed to stores that it leases). The only problem with selling real estate as a strategy is that it isn't sustainable. Nor does it make for a growth company.

How bad has it become for Sears and Kmart? A recent ranking by Morgan Stanley of retailers' sales per square foot is telling. Near the top are Best Buy and Costco, with $913 and $858, respectively. Wal-Mart and Home Depot check in around the middle at $472 and $380. Further down is Sears, at $243. Kmart doesn't even make the list. But Lampert on the day of the merger was quoted saying that Sears, in which ESL owns a 13.5% stake, does $80 per square foot more than Kmart. That means that Kmart does about $163 per square foot, well below J.C. Penney and Advanced Auto Parts.

None of that has been lost on the market. Since 1980 shares of Wal-Mart have risen more than 28,000%, Target is up nearly 4,900%, while Sears is up a mere 694%. (Kmart had dropped to being worthless before it was resurrected by Lampert.) Well, perhaps that's the point, right? Buy low, sell high, or so Lampert hopes. After all, he is the man some call the next Warren Buffett, a moniker that is neither new nor, strictly speaking, accurate. Fifteen years ago FORTUNE asked whether Lampert was the next Oracle of Omaha (see "Are These the New Warren Buffetts?" on fortune.com), and said, "The dozen young investment managers you'll meet here are brainy, ethical, and good at making money grow consistently." (Besides Lampert, the irrepressible Jim Cramer also made the list.) In a 1995 article in the Washington Post the same comparison was made, as it was again in New York magazine (by Jim Cramer no less!) in June. Though Buffett waves off any such comparisons, it should be pointed out that he makes a practice of buying healthy companies with strong management, while Lampert is an interventionist, a fixer-upper.

Lampert, who didn't return a call to be interviewed, learned at the feet of Nobel laureate James Tobin at Yale, then Robert Rubin at Goldman Sachs, and then Richard Rainwater in Texas, and he has hit home runs with investments in AutoZone and AutoNation. Lampert even talked his way out of the clutches of kidnappers last year, and has attracted investors like the Tisch family, David Geffen, and Michael Dell. But now he has taken a huge leap into the public eye, as well as into Wal-Mart's sandbox. It is a world of high-profile brands, endless media scrutiny, and giant elbows. Oh, and by this point, it's likely the easy money has already been made. -- Andy Serwer