The boards of Liverpool Mutual Homes and Symphony Housing Group are holding initial discussions regarding a potential merger, which would create a housing association with a 56,000 home portfolio.
Over the next few months the organisations will jointly carry out a detailed assessment of the potential benefits that a merger could generate. This assessment will inform a decision on whether or not to proceed further.
Symphony owns and manages 41,000 homes across 30 local authority areas in the North West. Liverpool Mutual Homes owns and manages 15,000 homes, predominantly in Liverpool.
A merged group would own and manage more than 56,000 homes across the North West and would provide services to more than 100,000 households. The annual turnover would be in excess of £230m and total assets would have a value of more than £1.7bn.
Steve Coffey, chief executive of LMH, said: "It is essential that we continuously look at ways of delivering better value for money so that we can invest in building new homes, improving services and delivering new services for our customers and communities.
"Whether it is helping to address the effects of austerity at a local level, or responding to the devolution agenda on both a sub-regional basis and across the North West, housing associations are ideally placed to have a positive impact upon peoples' lives.
"Over the next few months LMH and Symphony will explore in detail whether we can have an even greater impact in the future by merging the organisations and reinforcing our shared social purpose."