Not that no one saw it coming, but Louisiana-Pacific Corporation and Ainsworth Lumber Co. have officially terminated their acquisition bid after months of regulatory delays.
In a joint statement released Wednesday, the companies explained that they could not obtain regulatory approval without lengthy and expensive litigation with U.S. and Canadian regulatory authorities.
“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 CEO Curt Stevens. "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.”
“Although we are disappointed with this outcome, we look forward to advancing the ongoing growth and success of our business," added Ainsworth CEO Jim Lake. "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."
The agreement, dated Sept. 4, 2013, involved the acquisition of Ainsworth's outstanding common shares by LP. The $1.1 billion deal was aimed at helping LP make the most of the housing recovery by leveraging Ainsworth's resources and access to international growth markets.