International Paper Co., the world’s largest paper company, agreed to buy Weyerhaeuser Co.’s pulp business for about $2.2 billion to add production capacity of the raw material used in diapers and other hygiene products.

Annual cost savings from the all-cash deal will be about $175 million by the end of 2018, Memphis, Tennessee-based International Paper said Monday in a statement. The company expects to realize a $300 million tax benefit from the transaction.

The deal combines two of the largest businesses that make so-called fluff pulp, an absorbent material manufactured from softwood. The global market for fluff pulp is growing amid rising sales of adult-incontinence products, while as expanding middle classes in developing nations buy more tissue paper and other personal-care items.

The Weyerhaeuser assets have a total annual production capacity of almost 1.9 million metric tons and employ about 1,900 workers in the United States, Canada and Poland. The transaction, which is expected to close in the fourth quarter, will give International Paper five mills and two converting factories that produce fluff pulp, softwood pulp and specialty pulp.

“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,” International Paper Chief Executive Officer Mark Sutton said in the statement.

International Paper shares were unchanged at $43.27 at 9:56 a.m. in New York, having gained 15 percent this year. Weyerhaeuser was up 0.3 percent at $32.22 Monday and 7.5 percent for 2016.

The deal is International Paper’s largest since its $4.27 billion acquisition of rival corrugated-packaging manufacturer Temple-Inland Inc. in 2011.

Federal Way, Washington-based Weyerhaeuser said in a separate statement that the sale completes the first phase of its review of its cellulose-fibers business. Weyerhaeuser said it’s still reviewing the future of its liquid-packaging board facility and its newsprint and publishing-papers venture.

Weyerhaeuser expects to use some of the estimated $1.6 billion of after-tax proceeds from the pulp deal to repay term loans related to the company’s $2.5 billion share-buyback program.

Morgan Stanley was financial adviser to Weyerhaeuser on the transaction. Debevoise & Plimpton gave legal advice to International Paper.

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