Wyndham Worldwide Corporation (NYSE:WYN) is planning to buy La Quinta Holdings Inc (NYSE:LQ) in a $1.95 billion deal.

The agreement between the two companies will have Wyndham buying La Quinta’s hotel franchise and hotel management businesses. This will have it paying $8.40 per share in cash for LQ stock, which comes to a total of $1 billion.

The additional money in the deal will be to pay off certain fees and debt. This includes $715 million that will be used to pay off La Quinta’s current net debt. Another $240 million is being set aside to cover the expected costs of La Quinta’s taxable spinoff of owned real estate assets into CorePoint Lodging Inc. This spinoff will occur just before the transaction closes and CorePoint Lodging Inc. will be a publicly-traded company.

“La Quinta will immediately become one of our flagship brands,” Geoff Ballotti, President and CEO of Wyndham, said in a statement. “This acquisition also significantly expands our hotel management business and provides us with substantial new opportunities to drive increased growth in our business.”

Keith Cline, the current President and CEO of La Quinta, will become the head of CorePoint Lodging Inc. once the spinoff is complete. The deal will also have Wyndham merging the La Quinta loyalty program with its own rewards program.

Wyndham and La Quinta are expecting the deal to close during the second quarter of 2018. It will first need approval from regulators and shareholders before this can happen. The two companies are waiting for that and the spinoff of CorePoint Lodging Inc before finishing the acquisition.

WYN stock was up 5% and LQ stock was up 3% as of noon Thursday.

As of this writing, William White did not hold a position in any of the aforementioned securities.