Companies walked away from deal after U.S., Canadian regulators called for significant asset sales
VANCOUVER—Louisiana-Pacific Corp. has called off its US$1.1-billion deal to buy Ainsworth Lumber Co. Ltd. after regulators required significant asset sales, the companies said this week.
The companies said they walked away from the agreement after determining that approval under the Hart-Scott-Rodino Antitrust Improvement Act in the United States and the Canadian Competition Act could not be obtained “without divestitures significantly beyond those contemplated.”
“We believe this transaction would have led to positive outcomes for customers, employees and shareholders, and fundamentally disagree with the analysis by antitrust agencies of the competitive dynamics of our industry,” Louisiana-Pacific chief executive Curt Stevens said in a statement.
Under terms of the deal, first announced in September 2013, no break fee will be paid by either company.
Ainsworth, which has four manufacturing facilities located in Alberta, British Columbia and Ontario, is a major producer of oriented strand board, a key material used in residential home construction.
“Although we are disappointed with this outcome, we look forward to advancing the ongoing growth and success of our business,” Ainsworth chief executive Jim Lake said.
“Our strong competitive positioning, combined with our additional low-cost capacity and strong balance sheet profile will allow us to capitalize on the expected recovery in the U.S. housing market and continued growth in our export markets.”
Louisiana-Pacific had offered $3.76 per Ainsworth share and planned to assume the company’s debt.
The deal had “unanimous support” from Ainsworth’s board of directions, and from its largest shareholder—Brookfield Asset Management.