Nov. 29 (Bloomberg) -- West Fraser Timber Co. said it agreed to buy 13 sawmills from International Paper Co. for $325 million in cash, creating North America's second-largest lumber producer.
The transaction will boost West Fraser's lumber production capacity by 40 percent and is expected to close in the first quarter, the Vancouver-based company said today in a statement. Memphis, Tennessee-based International Paper is North America's biggest paper maker.
West Fraser is among North American lumber makers grappling with a slump in wood product prices from a slowdown in U.S. housing construction. Housing starts fell last month to an annual rate of 1.486 million, the lowest in more than six years, the Commerce Department said Nov. 17.
``Our view is that this market slump may continue for another 12 to 18 months,'' Chief Executive Officer Hank Ketcham said on a conference call with analysts. ``Keep in mind that when we look at growth opportunities our focus is not on the short term.''
West Fraser's purchase of the lumber operations would be the company's largest acquisition since it bought Weldwood of Canada Ltd. from International Paper in 2004 for about $1 billion.
Wednesday, November 29, 2006
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