Vancouver-based Canfor plans to buy Slocan Forest Products for a reported C$342m – a move which would make it the world’s second largest lumber company after Weyerhaeuser.
The combination, which would be better equipped to deal with the effects of wood import tariffs into the US, would produce 5.2 billion board feet of lumber a year.
Canfor’s main business is with US retailers including Home Depot and Lowe’s while Slocan is a major exporter of construction lumber to Japan. Combined annual revenue is about US$2.4bn and together they employ about 8,100 workers.
Shareholders have yet to approve the merger proposal under which Canfor would assume about US$133m in Slocan debt.
A previous merger effort between the two companies in the early 1990s was turned down by the provincial government which was concerned it would give the company too much timberland and that cost cuts would hurt forestry-depenedent communities.
Canfor’s chief executive David Emerson has pedged that the company will work with the government to ensure the timber market is competitive.
