Ilim is selling two sawmills in Georgia for US$180m, which will allow Interfor to expand in the US south-east and increase its annual capacity by 20%.
As part of the transaction Ilim will hold 5.5% of Interfor shares and have a representative on the board. Ilim has nominated Paul Herbert, who recently retired as CEO of a joint forestry, pulp and paper venture that included International Paper.
Interfor said the enlarged capacity of 2.6 billion board feet will make it among the five biggest North American lumber companies and the deal would increase earnings immediately.
Interfor CEO Duncan Davies said: "The Tolleson mills are a great fit with our operations in the US south-east and provide a larger footprint on which to build our presence in the region."
Ilim said the deal improves its ability to participate in the growing North American lumber market. "We are pleased to become a long-term strategic investor in Interfor," said Ilim CEO Alexander Sovetnikov.
