The charities have announced that all of Mountains’ assets will transfer to Redwings, and it will be renamed Redwings Mountains.
Redwings said that it was also in advanced merger discussions with the Welsh horse rescue and rehoming charity the Society for the Welfare of Horses and Ponies, with a view to formally expanding its work in Wales and securing a centre there.
Mountains, which has 14 staff, had an income of £1.6m in 2012, although this is more than double what was reported for the previous few years because of an unusually high level of legacy income.
Redwings employs 243 people and reported an income of £9.8m in 2012.
The trustees of Mountains, which is nearing its 30th year of existence, approached Redwings when it became clear the charity could not grow without help.
Lynn Cutress, chief executive of Redwings, said: "Mountains is much smaller than Redwings, and even though it has a great team of staff and an extensive group of volunteers, it was unable to expand to meet growing demand in Scotland because of a lack of resources."
It is anticipated that the asset transfer will be concluded officially in the next two weeks. The Mountains board will be disbanded, with one member joining the Redwings board.
Cutress will remain as chief executive, with a manager at Mountains reporting to Redwings. All paid staff and volunteer positions at Mountains will remain.
Cutress said Redwings’ "strategic idea" was to create a national group of horse and pony charities, and she was waiting for a decision from the Charity Commission on its merger with the SWHP.
SWHP has three full-time members of staff and its last reported annual income was £185,035.
Redwings already has many partners and affiliates in the UK, including the Bolenowe Animal Sanctuary in Cornwall and Crosskennan Lane Animal Sanctuary in Northern Ireland, with which it will formalise agreements after the two ongoing mergers are completed.
Cutress said there were no immediate plans for further mergers.
Ian Hunter, chair of Mountains, said: "We are confident that the work of our founder can be continued with the support of this highly respected equine charity, and that the welfare needs of horses, ponies and donkeys in Scotland will be met thanks to the caring and compassionate ethos of the Redwings Mountains staff and volunteers."