(Updates with details on the deal)
Nov 19 (Reuters) - Canadian wood products maker West Fraser Timber Co WFT.TO said on Thursday it would buy smaller rival Norbord Inc OSB.TO in an about C$4 billion ($3.05 billion) all-stock deal, strengthening its presence in North America and Europe.
Shareholders of Norbord, the world's largest producer of oriented-strand board (OSB), will receive 0.675 of a West Fraser share for each share held, or C$49.35 per share based on West Fraser's closing price on Nov. 18.
The offer represents a premium of 13.6% to Norbord stock's Wednesday close, and West Fraser shareholders will own about 56% of the combined company on closing.
The deal comes when lumber manufacturers are recovering after the COVID-19 pandemic forced many to shut their facilities and as demand for new homes and renovations boosts demand.
Oriented-strand boards are used for flooring, wall and roof sheathing, and Norbord has a presence in the United Kingdom and Western Europe.
West Fraser said the deal adds a strong cash flow generating business and it intends to retain all Norbord mills in North America and Europe.
The company will maintain a significant office presence in Vancouver, Toronto, Quesnel and Memphis, as well as in Norbord's existing European locations. ($1 = 1.3099 Canadian dollars)