West Fraser Timber has revealed plans to acquire Weldwood of Canada Ltd for C$1.26bn in what is the latest consolidation deal in British Columbia’s forest products sector.
The transaction, expected to be completed in the autumn, will make West Fraser North America’s third biggest lumber producer after Weyerhaeuser and Canfor.
West Fraser says it wants to acquire the assets of Weldwood, a subsidiary of International Paper, because they are low cost and are situated near its own operating areas.
The company has long been rumoured to be a potential consolidator because of its reputation as one of Canada’s most efficient producers.
Last autumn Canfor took over Slocan Forest Products for C$700m, while earlier this year Riverside Forest Products paid out C$100m for Lignum Ltd. More recently International Forest Products bought three sawmills from bankrupt Crown Pacific Partners for US$70m.
