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Equity Residential and AvalonBay Communities agreed to merge in an all-stock deal that would create a combined company with an enterprise value of approximately $69 billion and more than 180,000 rental apartments, the companies said Thursday.
Each AvalonBay share will be exchanged for 2.793 shares of Equity Residential common stock under the merger agreement. That exchange ratio would give AvalonBay investors a roughly 51.2% stake in the new entity, with Equity Residential shareholders holding the remaining 48.8%. The pro forma equity market capitalization of the combined company would be approximately $52 billion.
The deal, unanimously approved by both boards, is expected to close in the second half of 2026, subject to shareholder approval from both companies and other customary closing conditions. The transaction is structured to qualify as a tax-free reorganization for U.S. federal income tax purposes.
Expected cost savings include $175 million in gross synergies, with $125 million remaining on a net basis after accounting for real estate tax reassessments. With their portfolios overlapping in 95% of markets, Reuters reported, the companies believe the geographic alignment will support localized management structures and drive down operating costs.
