West Fraser to buy Norbord for $4 billion

Aquisition marks major expansion for B.C.-based West Fraser

Norboard makes a variety of manufactured wood products. | Norboard

B.C.'s West Fraser Timber Co. Ltd. (TSX:WFT) is buying Ontario's Norbord Inc. (TSX, NYSE:OSB) for $4 billion.

West Fraser today announced it will aquire Norbord, which makes oriented strandboard and particle board, in an all-stock transaction, with West Fraser to buy all of Norbord's outstanding shares at $$49.35 per share. Norbord shareholders will receive West Fraser shares at a rate of 0.675 per share.

Once the deal is closed, Norbord will cease operating under that name and will become a West Fraser division.

West Fraser has bought a number of mills in the U.S. in recent years, but the announced aquisition of Norbord marks the first major aquisition within Canada east of the Alberta border. West Fraser operates roughly two dozens mills and plants in B.C. and Alberta, and 23 in the U.S.

Norbord has 17 plants in the U.S, Europe and Canada (two in Quebec, one in Ontario and two in Alberta), and a regional office in Vancouver.

“Norbord’s OSB production is a perfect complement to the West Fraser portfolio, enabling us to deliver a wider range of wood products, and making us a more complete, efficient and valuable partner for our customers,” West Fraser CEO Raymond Ferris said in a news release.

“The Norbord business will also bring additional geographic diversity, and an expanded opportunity set, from its well-established positions in the United Kingdom and Western Europe."

The deal announced Thursday is expected to close in the New Year and is subject to approval by shareholders of both West Fraser and Norboard.

nbennett@biv.com

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