Two Canadian wood product companies — Norbord Inc. and Ainsworth Lumber Corp. — plan to combine their businesses through a $759-million deal to create one of the world’s largest producers of oriented strand board.
Norbord Inc.’s proposed acquisition of Ainsworth Lumber Co. Ltd. will create a global wood products giant with a market capitalization of about $2-billion.
Total OSB capacity will be about 7.7 billion square feet, making the new company – operating under the Norbord name – the largest in the OSB sector.
The companies estimate the combination will result in $45 million in annual synergies, primarily from technology transfers in their mills, improved sales and logistics and cost reductions over 18 to 24 months.
The combined company will maintain an office in Vancouver, BC, where Ainsworth has its headquarters, as part of strategic efforts to growth the companies’ exports to Asia.
Upon completion of the transaction, Norbord shareholders will own about 63 per cent of the combined company, while Ainsworth shareholders will own about 37 per cent of the new entity.
