Skip to main content
The Globe and Mail
Support Quality Journalism.
The Globe and Mail
First Access to Latest
Investment News
Collection of curated
e-books and guides
Inform your decisions via
Globe Investor Tools
per week
for first 24 weeks

Enjoy unlimited digital access
Enjoy Unlimited Digital Access
Get full access to
Just $1.99per week for the first 24weeks
Just $1.99per week for the first 24weeks
var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(}function setPanelState(o){dom.root.classList[o?"add":"remove"](,dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){window.requestAnimationFrame(function() {var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))});}pencilInit(".js-sub-pencil",!1); // via darwin-bg var slideIndex = 0; carousel(); function carousel() { var i; var x = document.getElementsByClassName("subs_valueprop"); for (i = 0; i < x.length; i++) { x[i].style.display = "none"; } slideIndex++; if (slideIndex> x.length) { slideIndex = 1; } x[slideIndex - 1].style.display = "block"; setTimeout(carousel, 2500); } //

The log yard at the West Fraser Timber sawmill in Quesnel, B.C. Dec. 16, 2010.

JOHN LEHMANN/The Globe and Mail

West Fraser Timber Co. Ltd. is buying Norbord Inc. in a $4-billion deal that will make the lumber and plywood producer into a major global manufacturer of panels used for construction sheathing and flooring.

Under the friendly deal, shareholders of Norbord will receive 0.675 of a West Fraser share for each Norbord share. That equates to $49.35 a share, the companies said. The offer represents a premium of 13.6 per cent over Norbord’s closing price on Wednesday.

Norbord shares jumped 11 per cent to $48.30 on the Toronto Stock Exchange on Thursday. West Fraser fell 2 per cent to $71.61.

Story continues below advertisement

Toronto-based Norbord is the world’s largest producer of oriented strand board (OSB), an engineered panel product that West Fraser chief executive Ray Ferris said fits well with his company’s lumber, plywood and medium density fibreboard products.

Talks began in the spring, although West Fraser has long been interested in acquisitions that would boost its presence in OSB, and has coveted Norbord as the industry leader, Mr. Ferris said.

“To me, the ‘Why now?’ is easy. We were always motivated, and the timing just happened to be today,” he said during a conference call. “I’m glad that, quite frankly, we weren’t successful maybe in the past so that this opportunity has arrived in this time in the way it has. You could say it is perfect timing for West Fraser.”

The addition of the Norbord operations will improve West Fraser’s ability to serve its key markets and provide new opportunities to expand the company, Mr. Ferris said.

“If you look at the fundamentals for wood and lumber consumption and the housing and formation needs in North America, and quite frankly, globally, that’s the business we’re in,” he told The Globe and Mail. “We want to be able to supply those products into a global marketplace.”

Norbord has production facilities in Canada, the United States, Britain and Belgium. Vancouver-based West Fraser said it expects annual savings of $80-million by merging the companies. Some of that will come from the ability to take advantage of the proximity of operations in regions such as the southern U.S. and Western Canada. The company does not plan on major layoffs to achieve its targets for cost savings, Mr. Ferris said.

For shareholders of Norbord, who will own 44 per cent of the combined business, the increased scale and diversity of products will offer better protection against cyclical downturns, said Peter Wijnbergen, Norbord’s CEO.

Story continues below advertisement

To proceed, the transaction requires the approval of investors that hold two-thirds of Norbord shares. Brookfield Asset Management, which owns 43 per cent of its shares, has agreed to support the deal. A simple majority of votes by cast by West Fraser shareholders is also required.

Assuming the transaction is approved, it would be completed in the first quarter of 2021.

B.C. billionaire Jim Pattison owns large stakes in West Fraser, as well as forestry rival Canfor Corp.

“We’ll absolutely support West Fraser and Brookfield. We will certainly support the transaction,” Mr. Pattison said in an interview. “West Fraser is a high-quality company with high-quality management and as far as Brookfield is concerned, they don’t make them any better.”

In March, Mr. Pattison raised his stake in West Fraser to 13.8 per cent from 11.9 per cent. He already owns nearly 51 per cent of Vancouver-based Canfor. West Fraser is Canada’s largest lumber producer, followed by Canfor.

There had been speculation of a West Fraser-Canfor merger, but B.C.’s NDP government would frown on consolidation in a sector already reeling from lumber mill closings across the province. In late 2019, minority shareholders in Canfor rejected Mr. Pattison’s $983.8-million cash bid to acquire stock that he doesn’t already own in the company.

Story continues below advertisement

A major shareholder in West Fraser is Seattle-based Ketcham Investments Inc., controlled by the family of Hank Ketcham, West Fraser’s chairman and former CEO. West Fraser said certain members of the Ketcham family have agreed to vote their 19-per-cent stake in favour of the transaction.

CIBC World Markets Inc. analyst Hamir Patel said the deal makes sense. “It provides West Fraser an opportunity to expand into another attractive category in wood products (OSB),” Mr. Patel said in a research note. “The combined business should see reduced earnings volatility given differing peak/trough cycles for OSB versus lumber and the combined entity should benefit from increased trading liquidity.”

West Fraser said it secured US$1.3-billion in credit facilities for the transaction, which are estimated to provide US$1.1-billion in undrawn capacity after the deal closes.

The deal includes a break fee of $110-million should it fail to close.

Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.

Your Globe

Build your personal news feed

  1. Follow topics and authors relevant to your reading interests.
  2. Check your Following feed daily, and never miss an article. Access your Following feed from your account menu at the top right corner of every page.

Follow the authors of this article:

Follow topics related to this article:

View more suggestions in Following Read more about following topics and authors
Report an error Editorial code of conduct
Tickers mentioned in this story
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to If you want to write a letter to the editor, please forward to

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

If you do not see your comment posted immediately, it is being reviewed by the moderation team and may appear shortly, generally within an hour.

We aim to have all comments reviewed in a timely manner.

Comments that violate our community guidelines will not be posted.

UPDATED: Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies