LP, Ainsworth terminate acquisition agreement, after determining regulatory approvals not obtainable without divestitures significantly beyond those contemplated; litigation with regulators in US, Canada could have taken more than a year, says LP's CEO
NASHVILLE, Tennessee & VANCOUVER, British Columbia
May 14, 2014
– Louisiana-Pacific Corporation (NYSE: LPX) (“LP”) and Ainsworth Lumber Co. Ltd. (TSX: ANS) (“Ainsworth”) announced today that they are terminating their previously announced agreement dated September 4, 2013 (the “Arrangement Agreement”) in which LP would acquire all of the outstanding common shares of Ainsworth. LP and Ainsworth have determined that the regulatory approvals (including in particular expiration of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvement Act of 1976, as amended, and approval under the Canadian Competition Act) 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 Arrangement Agreement, no termination fee will be payable by either party.
Cautionary Statement Regarding Forward-Looking Information
Forward-looking information is provided in this news release pursuant to National Instrument 51-102 promulgated by the Canadian Securities Administrators and the Private Securities Litigation Reform Act of 1995. LP and Ainsworth believe that expectations reflected in such information are reasonable, but no assurance is given that such expectations will be correct. Forward-looking information is based on LP’s and Ainsworth’s beliefs and assumptions based on information available at the time the assumptions were made and on management’s experience and perceptions of historical trends, current conditions and expected further developments as well as other factors deemed appropriate in the circumstances. Investors are cautioned that there are risks and uncertainties related to such forward-looking information and actual results may vary. Important factors that could cause actual results to differ materially from those expressed or implied by such forward looking information include, without limitation, factors detailed from time to time in LP’s or Ainsworth’s periodic reports filed with the Canadian Securities Administrators, the U.S. Securities and Exchange Commission or other regulatory authorities. The forward-looking information is made as of the date of this news release and neither LP nor Ainsworth assumes any obligation to update or revise them to reflect new events or circumstances, except as explicitly required by applicable securities laws.
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. From manufacturing facilities in the U.S., Canada, Chile and Brazil, LP products are sold to builders and homeowners through building materials distributors and dealers and retail home centers. Founded in 1973, LP is headquartered in Nashville, Tennessee and traded on the New York Stock Exchange under LPX. For more information, visit www.lpcorp.com.
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. Ainsworth’s four OSB manufacturing facilities, located in Alberta, British Columbia and Ontario, have a combined annual capacity of 2.5 billion square feet (3/8-inch basis). Ainsworth is a publicly traded company listed on the Toronto Stock Exchange under the symbol ANS. For more information, visit www.ainsworthengineered.com.
The website at www.ainsworthengineered.com (the “Ainsworth Website”) is operated by Ainsworth, and LP disclaims any responsibility for the accuracy or completeness of any information contained on the Ainsworth Website or on any website linked to the Ainsworth Website.
The website at www.lpcorp.com (the “LP Website”) is operated by LP, and Ainsworth disclaims any responsibility for the accuracy or completeness of any information contained on the LP Website or on any website linked to the LP Website.