A $10.5 billion deal would create a self-storage giant in the U.S.

A proposed megadeal in the self-storage business would create a $57 billion company overseeing square footage, if it were combined in a single location, of a small city such as Cupertino, California, or Chapel Hill, North Carolina.

Public Storage said Monday that it will buy National Storage Affiliates in an all-stock deal worth about $10.5 billion, creating a company with 327 million square feet of storage at nearly 4,600 locations in the U.S.

Public Storage said it wants to expand its presence in areas like the Sun Belt and other regions that are likely to grow in population.

The deal, if approved, would combine the largest and the fourth-largest U.S. self-storage companies by market capitalization. Extra Space Storage and CubeSmart are the next two largest companies.

Public Storage, which has been based in Glendale, California, said this year that it is relocating to Frisco, Texas, near Dallas. National Storage is based in Greenwood Village, Colorado, a suburb of Denver.

Investors that hold National Storage common stock and operating partnership units will receive 0.14 of a share of Public Storage common stock or partnership units for each National Storage share or unit that they own. This represents $41.68 per share.

Shares of National Storage jumped nearly 30% at the opening bell, while Public Storage’s stock fell less than a percent.

Before the transaction closes, Public Storage and limited partners in National Storage’s operating partnership will form a joint venture that includes 313 properties on National Storage’s operating platform comprising 19.6 million rentable square feet across 28 states and Puerto Rico with an estimated value of approximately $3.3 billion.

Operating partnership unitholders are expected to own about 80% of the joint venture at its start, with Public Storage holding the remaining stake. Public Storage will exclusively manage the joint venture portfolio and will earn customary property management, asset management and tenant reinsurance income.

The deal, which was approved by the boards of both companies, is expected to close in the third quarter. It still needs approval from National Storage equity holders as well as regulators.

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