12/08/2014 10:47 EST | Updated 02/07/2015 05:59 EST

Norbord, Ainsworth Lumber to merge in $759M deal

Two Canadian makers of wood products —​ Norbord Inc. of Toronto and Ainsworth Lumber Corp. of Vancouver — plan to combine their businesses in a $759-million deal.

The merged company will become one of the world's largest producers of oriented strand board, a panel made of compressed wood fibres that is used in building homes.

“This transaction unites two complementary businesses behind a common vision of enhanced service to our customers and growth in North America, Europe and Asia,” Norbord president and chief executive officer Peter Wijnbergen said.

Wijnbergen is to become CEO of the combined company which will take the Norbord name.

Norbord is offering 0.1321 of a Norbord share for each Ainsworth share, valuing Ainsworth shares at about $3.15, about 5.7 per cent above Friday’s closing price.

Both companies are majority owned by Toronto-based Brookfield Asset Management Inc.

Norbord has seven North American wood product mills in the U.S. southeast and Quebec and four mills in Europe.  Ainsworth holds three mills in Western Canada and one mill in Ontario. Their combined sales are about $1.63-billion US annually.

The combined companies hope to take advantage of an increase in U.S. home-building as well as Ainsworth's business lines geared to export to Asia.