On Monday, shares of real estate investment trust Mid-America Apartment Communities Inc. (MAA Quick QuoteMAA - Free Report) are falling, down almost 6% in morning trading after the company announced it would acquire Post Properties Inc. , an apartment complex developer, for roughly $3.88 billion.

PPS stock was also moving in morning trading, but in the opposite direction. As of 10:42 AM EST, it was up almost 8.5%.

The Wall Street Journal originally reported the merger, which will create the biggest publicly traded multi-family apartment real estate investment trust (REIT), forming an entity with 317 total properties and 105,000 units.

Right now, Mid-America owns just under 80,000 units in 15 states, while Post Properties has about 24,000 apartment units in over 60 communities.

The newly combined company will have a market cap of about $17 billion, with the biggest share of its operating income coming from Charlotte, NC, Dallas, TX, and Atlanta, GA. Under the terms of the deal, shareholders of Post Properties will receive 0.71 newly issued Mid-America shares for each share that they own.

According to Bloomberg, which cites the Journal, “Apartment managers have benefited from a recovery in the housing market as rising home prices have turned many would-be buyers into renters… At the same time, growth in rents has begun to slow, creating an incentive for mergers that reduce costs.”

The merger must still be approved by shareholders of both Mid-America and Post Properties, but they said the deal is expected to be completed in the fourth quarter.

Mid-America will continue to trade under the ticker “MAA.”

JPMorgan is advising Post Properties, while Citigroup Global Markets is Mid-America’s financial advisor.

MID-AMER APT CM Price, Consensus and EPS Surprise

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