Norbord acquired by West Fraser for $3.1 billion
West Fraser Timber announced the purchase of Norbord on Thursday. The deal, which should close in the first quarter of 2021 according to a press release sent out by West Fraser, was worth $3.1 billion.
Norbord, which is the world’s largest producer of Oriented Strand Board (OSB), has had a facility in Chambers County since 1999. The mill has roughly 150 workers in its Lanett mill.
“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,” Raymond Ferris, President and Chief Executive Officer of West Fraser, said in a press release. “Norbord is the largest global OSB producer with a well-earned reputation for cost and margin performance, and for expanding the use of OSB in new applications and industries.
“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. This transaction gives us additional financial flexibility to pursue strategic growth opportunities and better positions our company to deliver value to shareholders through the cycle. Our companies have complementary operating cultures, with a common priority on safety, sustainability and cost management, and we are thrilled to welcome Norbord’s talented employees to West Fraser. We look forward to drawing from best practices across the operations as we pursue the significant strategic opportunities this transaction will unlock.”
West Fraiser will receive all of Norbord’s shares. Current Norbord shareholders will receive .675 of a West Fraiser share, which is valued at $37.48, per share owned.
“This transaction recognizes Norbord’s global OSB position and is a very exciting opportunity for our customers, our employees and our shareholders,” said Peter Wijnbergen, President and Chief Executive Officer of Norbord. “
Joining West Fraser will allow us to expand our profile with our core new home construction customers, and provides a stronger platform to pursue our industrial OSB products strategy. Norbord shareholders will have meaningful participation in a more diversified and resilient wood products leader with a superior ability to accelerate growth, and an impressive track record of cost leadership, margin performance, and shareholder returns. For our team, this will provide expanded opportunities as part of a larger company with common values and a shared priority on safety. Our board and executive team have great respect for West Fraser, and we look forward to being a part of a much broader business with the West Fraser team.”
In its press release, West Fraser said that all mills in North America will remain open.