West Fraser Timber Co. Ltd.’s C$4 Billion Acquisition of Shares in Norbord

Torys LLP represented Norbord on the deal.

West Fraser Timber Co. Ltd. and Norbord Inc. announced that they entered into a strategic business combination pursuant to which West Fraser will acquire all of the outstanding common shares of Norbord in an all-stock transaction valued at approximately C$4.0 billion (US$3.1 billion). Following closing, the combined company will operate as West Fraser.

The companies entered into a definitive agreement pursuant to which Norbord shareholders will receive 0.675 of a West Fraser share for each Norbord share held, which equates to C$49.35 (US$37.78) per Norbord common share, based on the closing price of West Fraser common shares on November 18, 2020. Upon closing, current West Fraser shareholders will own approximately 56% of the company, with current Norbord shareholders owning approximately 44%.

The transaction will be implemented by way of a court-approved plan of arrangement under the Canada Business Corporations Act and requires the approval of 66% of the votes cast by Norbord shareholders present in person or represented by proxy at a special meeting of Norbord shareholders to be held to consider the proposed transaction. West Fraser will be required under the policies of the Toronto Stock Exchange to obtain the approval of a simple majority of the votes cast by the holders of West Fraser’s common and Class B shares at a special meeting of West Fraser shareholders to be held to consider the proposed transaction. It is anticipated that both meetings will be held in January 2021.

In addition to shareholder approvals, the transaction will also be subject to approval by the Ontario Superior Court of Justice, regulatory approvals and closing conditions customary in transactions of this nature. The transaction is expected to close in the first quarter of 2021.

Norbord is a leading global manufacturer of wood-based panels with assets of US$1.9 billion and annual sales of approximately US$1.7 billion. It has 17 operations in the United States, Europe and Canada.

West Fraser is a leading diversified wood products company and one of North America’s largest lumber manufacturers with 45 facilities in British Columbia, Alberta, and the southern United States.

The TOrys team included Karrin Powys-Lybbe (Picture), David Forrester, Emily Debono and Adam Ibrahim (corporate/M&A), Omar Wakil and Ian Li (competition), Susan Nickerson and Jennifer Lennon (employment) and Gwen Watson (tax).

Involved fees earner: Emily Debono – Torys LLP; David Forrester – Torys LLP; Adam Ibrahim – Torys LLP; Jennifer Lennon – Torys LLP; Ian Li – Torys LLP; Susan Nickerson – Torys LLP; Karrin Powys-Lybbe – Torys LLP; Omar Wakil – Torys LLP; Gwen Watson – Torys LLP;

Law Firms: Torys LLP;

Clients: Norbord Inc. ;

Author: Ambrogio Visconti