LP and Ainsworth have determined that the regulatory approvals cannot be obtained without divestitures significantly beyond those contemplated in the Arrangement Agreement without engaging in lengthy and expensive litigation with the regulatory authorities in the US and Canada.
Said Curt Stevens, LP’s CEO: “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. Our business experience, supported by expert economic analysis, continues to be that North America is an integrated market for structural panels. We will continue to compete on a continent-wide basis but feel we have no choice but to terminate the agreement rather than accept the distraction, disruption, costs and risk of litigating this matter in both the U.S. and Canada, where the process could take upwards of a year.”
Added Mr. Stevens: “LP remains well positioned to capitalize on forecasted growth in housing starts and build on the momentum of positive adjusted earnings across all our segments. We are a leader in our markets, have a strong balance sheet, and will continue to run our operations to meet customer needs while pursuing the growth strategies we have in place.”
Said Jim Lake, Ainsworth’s CEO, “Although we are disappointed with this outcome, we look forward to advancing the ongoing growth and success of our business. 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. We thank our customers, employees and other stakeholders who supported the proposed transaction and we look forward to continuing to deliver strong returns for our shareholders.”
LP and Ainsworth mutually agreed to terminate the agreement under these conditions. According to the terms of the agreement, no termination fee will be payable by either party.
Louisiana-Pacific Corporation is a leading manufacturer of quality engineered wood building materials including OSB, structural framing products, and exterior siding for use in residential, industrial and light commercial construction.
Ainsworth Lumber Co. Ltd. is a leading manufacturer and marketer of oriented strand board (“OSB”) with a focus on value-added specialty products for markets in North America and Asia.
