The consolidation is the latest major move in the social housing sector still reeling from the collapse of Connaught, Rok and Kinetics.

Apollo will retain its name but become part of the Keepmoat “family of companies”.

The deal will create a £1bn turnover business employing 4,000 staff and is due to be finalised later this year subject to approval from the competition authorities.

Chief executives for both companies, David Blunt for Keepmoat and David Sheridan for Apollo, explained the plans to Inside Housing.

Blunt said: “Dave [Sheridan] and I have known each other for many years and it [the merger idea] originated in Harrogate this year when we were having a chat thinking about the new world, thinking about Cavendish and we got thinking about being a market leader in the UK.

“It is a compelling proposition whether you are a customer or a stakeholder and that’s why we are considering it.”

The chief executives denied rumours Apollo was struggling financially, and stressed the move was not a takeover but a chance to create a market leader in community regeneration.

Sheridan said: “There is no truth in that, we have never had an issue with our numbers or targets. Our business independently is still strong.

“The numbers speak for themselves and it merely suits other people to have rumours.”

Blunt said: “This is not a takeover, it is a merger. Both are very successful.”

Keepmoat added in a statement this morning: “In addition, the enlarged group will benefit from numerous cross selling opportunities with little geographical overlap whilst delivering significant financial synergies.

“The move will also enable sharing of resources and expertise to reinforce nationwide service delivery for both companies.

“In particular, Apollo will help to strengthen Keepmoat’s maintenance capabilities in the north and Keepmoat will boost Apollo’s new build offering in the south.”