Vancouver’s West Fraser Timber to purchase rival Norbord in $3bn buyout deal

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Vancouver’s West Fraser Timber to purchase rival Norbord in $3bn buyout deal

On Thursday, West Fraser Timber Ltd., the Vancouver-headquartered Canadian Forestry company primarily engaged in producing lumber, LVL, MDF, pulp, plywood, wood chips and newsprint, had issued a statement saying that its management board had agreed to an all-stock C$4 billion takeover deal for its smaller rival Norbord Inc., bolstering its presence in Europe and North America.

In point of fact, West Fraser’s latest all-stock takeover deal for Norbord Inc. came forth at a critical time, while a number of lumber producers across the world had been resuming their operations following a pandemic-led shutdown amid a steep uptick in the global housing market, largely due to a rush towards the suburbs because of a renewed pandemic-led restriction in the densely populated cities alongside a multi-year low mortgage rate in a gauge of major global economies.

On top of that, according to the terms of the all-stock acquisition deal for Norbord Inc., the world’s biggest producer of OSB or Oriented-Strand Board, shareholders of Norbord Inc.

would receive a 0.675 of West Fraser’s share for each Norbord Inc. share or C$49.35 per share based on West Fraser’s Nov. 18 closing price, while the agreed offer accounts for a premium of an approximated 13.6 per cent of Norbord Inc.’s closing price on Wednesday and the West Fraser stakeholders would receive 56 per cent of the merged entity on Wednesday’s market closure.

Canada’s West Fraser takes over Norbord to bolster present in Europe

Aside from that, since the acquisition deal for Norbord would strengthen West Fraser’s footings in Western Europe and UK, where Norbord OSDs (Oriented-Strand Boards) have had a blazing presence, West Fraser was quoted saying shortly after the announcement that the deal would streamline a strong cash flow into its business and the Canadian lumber giant would retain all of Norbord mills in Northern American and Europe, which in effect would provide West Fraser with a monumental office presence in a slew of Northern American cities such as Memphis, Quesnel, Toronto and Vancouver.