(Reuters) -Rayonier ( RYN ) and PotlatchDeltic ( PCH ) said on Tuesday they will merge in an all-stock deal valued at about $8.2 billion, including debt, to create one of North America's largest publicly traded timber and wood products companies.

The merger comes as lumber markets remain volatile, whipsawed by shifting tariffs and a weak construction outlook.

The combined company will own about 4.2 million acres of timberland across 11 U.S. states and operate seven wood manufacturing plants, providing it scale in a year when prices have swung sharply due to a cooling housing sector.

President Donald Trump's new tariff on imported softwood lumber and production cuts at North American sawmills have lifted prices recently.

The new company, which will be renamed after the merger completes, will operate seven wood products manufacturing facilities, including six lumber mills with total capacity of 1.2 billion board feet and one industrial plywood mill.

Under the deal, PotlatchDeltic ( PCH ) shareholders will receive 1.7339 common shares of Rayonier ( RYN ), representing an implied price of $44.11 per PotlatchDeltic ( PCH ) share.

This values PotlatchDeltic ( PCH ) at $3.41 billion, according to Reuters calculation.

Shares of Rayonier ( RYN ) were down 1.2%, while those of PotlatchDeltic ( PCH ) jumped 5% in pre-market trading.

The per share value, also represents a premium of 8.25% to PotlatchDeltic's ( PCH ) closing stock price on October 10, the last business day prior to execution of the deal, the companies said.

Rayonier ( RYN ) shareholders will own about 54% of the combined company and PotlatchDeltic ( PCH ) holders the remaining 46%, upon closing of the deal expected in late first quarter or early second quarter of 2026.

Rayonier ( RYN ) Chief Executive Mark McHugh will lead the new company, while PotlatchDeltic ( PCH ) CEO Eric Cremers will serve as executive chair for two years.

The new firm's headquarters will be in Atlanta, with regional offices in Spokane, Washington, and Wildlight, Florida.

(Reporting by Katha Kalia and Arunima Kumar in Bengaluru; Editing by Leroy Leo and Saumyadeb Chakrabarty)