Aviv shareholders will receive 0.90 Omega share for each held, the companies said. This values Aviv at $34.97 per share based on Omega closing price on Thursday.
The real estate investment trust's (REIT) offer represents a premium of 16 percent to Aviv's closing price on Thursday.Aviv shares were up at $34.50 before the bell, just shy of the offer price.
The deal is the latest this year in the U.S. home-healthcare industry as it grapples with cuts in federal spending and lower Medicare insurance reimbursement rates.
Ventas Inc (VTR.N), one of the largest U.S. REITs, in June said it would buy American Realty Capital Healthcare Trust, and NorthStar Realty Finance Corp (NRF.N) said in August it would purchase Griffin-American Healthcare REIT II Inc.
Maryland-based Omega invests in and provides financing to the long-term healthcare industry.
Chicago-based Aviv owns post-acute and long-term care skilled nursing facilities and other healthcare properties.
The combined firm will own 874 properties in 41 U.S. states and is expected to save about $9 million in costs, the companies said on Friday.
Omega Chief Executive Taylor Pickett will serve as CEO of the combined company after the deal closes, expected in the first quarter of 2015.
Aviv Chairman and CEO Craig Bernfield will join the board.
The equity portion of the deal is based on Aviv's 59.37 million shares outstanding at the end of June.
The companies said the deal values Aviv at $3 billion.
Aviv had total liabilities of $919.2 million at the end of October.
Morgan Stanley & Co LLC is Omega's financial adviser and Bryan Cave LLP, Doran Derwent PLLC and Kaye Scholer LLP are legal counsels.
PJT Partners and Goldman, Sachs & Co are Aviv's financial advisers and Sidley Austin LLP is the legal counsel.
Omega's shares closed at $38.85 on Thursday.
