Mid-America Apartment Communities will acquire Colonial Properties Trust, with the latter having a strong presence in the local market.
MAA is based in Memphis, while CPT is based in Birmingham.
The two companies have a combined 10 apartment communities in Nashville, including Avondale at Kennesaw Farms, Brentwood Downs and Colonial Grand at Bellevue.
MAA shareholders will own 56 percent of the combined company upon completion of the deal while Colonial Properties shareholders will get 44 percent.
The combined company will keep the MAA name, and its corporate headquarters will remain in Memphis.