LP and Ainsworth terminate takeover agreement
16 May 2014Louisiana-Pacific’s US$1.1bn takeover deal of Ainsworth has collapsed with both firms blaming regulatory bodies for attaching too onerous conditions to the deal.
The OSB manufacturers released a joint statement saying they were mutually terminating the deal – first unveiled last September – because the necessary regulatory approvals could not be obtained without divesting significantly more of the business than originally contemplated in the agreement.
They said lengthy and expensive legal action with the regulatory authorities in the US and Canada would have been required. Had it gone ahead, the deal would have seen the world’s largest OSB manufacturer – LP – become even larger, encompassing 18 OSB mills in North and South America.
“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,” said LP Curt Stevens.
LP said it had “no choice” but to terminate the agreement rather than experience the distraction, disruption, costs and risk of taking the matter to court in both the US and Canada – a process which could have taken more than a year.
Ainsworth CEO Jim Lake said he was disappointed with the outcome but the company intended to continue to capitalise on the recovery in the US housing market.
