Harvest Housing Group and Arena Housing Group will merge in April 2012, creating a new group with 32,000 homes across the North West, Cumbria, Staffordshire and Yorkshire.
The merger was agreed in principle by both organisations and will be confirmed following consultation with residents, a large number of whom have already been involved in designing the type of services the new group would offer.
The housing groups said the main driver behind the move is to harness the financial strength of both companies by maintaining and improving services for existing customers whilst developing new affordable housing.
Both Harvest and Arena received 100% of the Homes & Communities Agency funding they applied for in 2011, enabling them to develop more than 1,300 new homes over the next three years.
Brian Cronin, chief executive designate of the new group and Arena chief executive, said: "This is a really exciting time for everyone at both groups. Through a merger we will have increased capacity and experience for innovation and new projects. It will give us the capacity to offer enhanced development and support for neighbourhoods, greater efficiency through shared services and the ability to maintain service levels to customers in what is an uncertain economic climate. The merger will also give us greater financial security in the future, helping us to safeguard our services to customers."
Ian Perry, chief executive of Harvest, who has led Harvest's growth over the past 25 years, added: "From the beginning it was clear that Harvest and Arena shared the same values and vision. This is very much a merger of equals, and I am delighted that two excellent organisations are joining together."
The chairman designate of the new organisation, which will be named following consultation with residents, will be Kathy Cowell, former chairman of Harvest, with Arena's Mark Tattersall taking the deputy chairman position.
Cowell said: "I am looking forward to working with Brian and am pleased that Ian will stay on to lead the transition and continue to represent the new group's interests with partner organisations."
Discussions regarding a merger between Harvest and Arena began in 2010 and since then extensive consultation has been carried out between both organisations, including staff and customers. A detailed business case was presented in September 2011 and the final decision to merge will be confirmed once customer consultation has been completed at the end of this year.
Harvest Housing Group is a not-for-profit registered housing provider with over 18,000 homes and is based in Levenshulme, south Manchester.
Arena Housing Association was formed following the merger of St Helens-based Grosvenor Housing Association and Liverpool-based Liver Housing Association in August 2001.
In October 2006, Liverpool-based Arena Housing Group was established by creating a parent company with six partner organisations, between them managing almost 14,000 properties across Merseyside, the North West and Yorkshire.