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International Paper Co. (NYSE: IP) was making waves early Monday morning following a merger announcement. The company announced that it has entered into a definitive agreement to purchase Weyerhaeuser Co.’s (NYSE: WY) pulp business. The transaction is expected to close in the fourth quarter of 2016.

Under terms of the agreement, International Paper will acquire five pulp mills and two converting facilities that produce fluff pulp, softwood pulp and specialty pulp for a number of consumer applications, including diapers, other hygiene products, tissue and textiles.

International Paper expects to realize a tax benefit with an estimated net present value of approximately $300 million. Including this benefit, the net price is roughly $1.9 billion. International Paper forecasts annual synergies of about $175 million by the end of 2018, which will require the need for one-time costs of approximately $85 million.

Weyerhaeuser’s pulp business has roughly 1900 employees throughout the United States.

Mark Sutton, chairman and CEO of International Paper, commented:

Weyerhaeuser’s pulp business has an outstanding customer base served from low-cost, well-run assets that complement our existing system and offers significant synergy opportunities. This transaction will position us as the premier global supplier of fluff pulp and will enhance our ability to generate additional free cash flow.  We look forward to working with the talented employees of Weyerhaeuser as we integrate our businesses and create an even stronger company.

Shares of International Paper were trading at $43.30 Monday morning, with a consensus analyst price target of $45.87 and a 52-week trading range of $32.50 to $54.40.