Addaction and KCA will merge next year to form what is likely to be one of the 90 largest charities registered in England and Wales.
KCA, which provides mental health, drug and alcohol services, will become a wholly owned subsidiary of Addaction, an addiction charity.
The two organisations have a joint income of over £75m, which would if combined would make them the 88th largest charity on the Charity Commission register.
Currently there are no plans for redundancies or service closures but a full consultation about central staff roles will be held over the next 12 months.
The two charities will not close any services, and say there is little crossover of services because they work in different parts of the country.
The charity will be run from Addaction's London offices.
Simon Antrobus will continue as chief executive of Addaction and Ryan Campbell will remain head of the KCA portion of the new organisation, although his new job title is yet to be decided.
The new charity is currently seeking three new trustees to join the eight-strong team of trustees at Addaction. The KCA board of trustees will be dissolved but given the opportunity to move over to the Addaction board.
“We have known each other and worked together in the past and we realised we are a great fit in terms of our culture, our values and the ambition we have,” a spokesman for Addaction told Civil Society News.
“We are both organisations that really take pride in putting our service users at the centre of what we do. So we are a natural fit in a lot of ways. We really felt that together, we’d be able to provide better outcome for people who we work with.”
"Obviously a bigger organisation will need a bigger management structure and central support structure. But that structure hasn’t been finalised yet,” he said.
“It’s a really positive merger rather than a rescue," the spokesman said. "KCA has plenty of reserves and won’t lose any contracts. But being a bigger organisation helps us to provide more for more people. It makes sense in the current climate to join forces.”
KCA saw its income double over the past five years but spending also increased. Last year the charity earned almost £25.5m but spent almost £900,000 more than it earned.
Addaction also saw a rise in income – growing by almost £14m in the past five years to almost £51m.
Addaction currently employs 1,200 staff and KCA 400 staff. All staff will be transferred to new terms and conditions by June, 2015.
