West Fraser Timber Co. Ltd. has signed a deal to acquire Norbord Inc. in an all-stock transaction valued at $4.0 billion.
The deal announced Thursday will make West Fraser a top global producer of both lumber and oriented strand board.
"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 chief executive Raymond Ferris said in a statement.
Under the deal, Norbord shareholders will receive 0.675 of a West Fraser share for each Norbord share they hold.
West Fraser shareholders will own 56 per cent of the combined company, with current Norbord shareholders owning 44 per cent.
Two of Norbord's current independent directors will join the West Fraser board once the deal is complete.
Ferris will continue as West Fraser's chief executive, while Norbord's Peter Wijnbergen will be appointed president of engineered wood, and be responsible for the company's OSB, plywood, particleboard, MDF and veneer operations.
Sean McLaren, West Fraser's vice-president of U.S. Lumber, will be appointed president of solid wood, and be responsible for all of the company's lumber operations.
The deal requires approval through a two-thirds majority vote by Norbord shareholders and a simple majority vote by holders of West Fraser's common and class B shares.
Brookfield Asset Management Inc., Norbord's principal shareholder with a 43 per cent stake, has agreed to support the agreement.
The deal is expected to close in the first quarter of 2021.
