International Paper ( (IP) - Get Report ) said Monday it would acquire the pulp business of Weyerhaeuser ( (WY) - Get Report ) in a $2.2 billion deal that would add additional scale to what is already the world's largest paper products company.

Terms of the deal call for Memphis-based International Paper to acquire five pulp mills and two converting facilities that produce fluff pulp, softwood pulp and specialty pulp for a diapers, tissues, textiles and other hygiene products. The operation has nearly 1.9 million metric tons of capacity. IP's stock rose 0.89% in Tuesday morning trading, to $43.66, while Weyerhaeuser's climbed 0.87%, to $32.40.

This is International Paper's largest transaction since its $4.3 billion purchase of Temple-Inland Inc. in 2011. The company in a statement said that the assets and about 1,900 employees in the U.S., Canada and Poland will give IP a more global footprint that is better able to respond to shifts in demand.

"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," IP chairman and CEO Mark Sutton said. "This transaction will position us as the premier global supplier of fluff pulp and will enhance our ability to generate additional free cash flow."

IP said that the transaction would yield a tax benefit of about $300 million, lowering the net purchase price to $1.9 billion. The company said it expects to extract $175 million in annual synergies by the end of 2018, and expects to spend about $85 million on integration.

It remains to be seen whether antitrust regulators will weigh in on IP gaining added heft. The company generated sales of $22 billion in 2015, producing industrial and consumer packaging products, uncoated papers and pulps from operations in 24 countries worldwide. The companies said they expect to close the deal before year's end.

Federal Way, Wash.-based Weyerhaeuser announced in November it would consider options for the business as part of a portfolio overhaul following its $8.4 billion acquisition of Plum Creek Timber Co. With the Plum Creek purchase Weyerhaeuser became one of the largest private landowners in the U.S. with more than 13 million acres of timberland, shifting its focus on timber and away from cellulose fibers.

Company CEO Doyle Simons in a statement said that the sale "delivers compelling value for Weyerhaeuser shareholders and further focuses our portfolio as we work to be the world's premier timber, land, and forest products company."

Weyerhaeuser said it expects to use a substantial portion of the estimated $1.6 billion in after-tax proceeds to pay down a term loan issued in conjunction with a $2.5 billion share repurchase plan. The company is still reviewing options for other assets including its liquid packaging board facility and a newsprint joint venture.

The deal would give International Paper about 40% of the North American fluff pulp market, according to Macquarie Capital estimates. Analyst Danny Moran in a note wrote the deal, priced at about 3.6 times Ebitda when factoring in synergies and tax benefits, is "quite attractive," but noted that the long-term success of the purchase will likely be determined by where pulp pricing moves over time.

"Although fluff pulp demand is quite solid at 4-5% annually, we note that the current outlook for fluff pulp appears oversupplied," Moran wrote.