(Bloomberg) -- Canadian lumber giant West Fraser Timber Co. agreed to buy Norbord Inc. in an all-stock deal for about C$4 billion ($3.05 billion) to expand its position in wood products.

Norbord shareholders will receive 0.675 of a West Fraser share for each share they own, which equates to C$49.35 based on West Fraser’s closing price on Wednesday, the timber companies said Thursday in a statement. That represents a 14% premium for Norbord investors, who would end up owning about 44% of the combined company, according to the statement.

Canadian lumber companies have been pulling in record earnings because of a wave of home building and renovations amid the Covid-19 pandemic. Norbord, which is 43% owned by Brookfield Asset Management Inc., is North America’s biggest producer of oriented strand board, a plywood substitute used mainly in residential construction. Canadian billionaire Jim Pattison is a major West Fraser shareholder and individually owns 13.4%, according to data compiled by Bloomberg.

Norbord soared 11% to C$48.26 as of 9:44 a.m. in Toronto, bringing its gain this year to 40%, while West Fraser fell 1.5% to C$72.01.

Toronto-Dominion Bank advised West Fraser on the transaction and Bank of Nova Scotia was the independent adviser to the company’s board.

(Updates with share movement in fourth paragraph.)

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