West Fraser Timber Co. Ltd. has struck a friendly agreement to buy rival Norbord Inc. Thursday in an all-stock deal worth $4 billion.

The deal comes at a 13.6 per cent premium to the closing price of Norbord’s common shares on Wednesday.

 “The opportunity to acquire a world-class leader in production of low-cost, high-margin [oriented strand board] is a perfect complement to our product portfolio,” West Fraser President and Chief Executive Officer Raymond Ferris said in an interview with BNN Bloomberg Thursday.

“It really lays the groundwork for us to be just a complete supplier to our customers.”

Ferris added the acquisition provides the company with an opportunity to enter into the European market.

“Norbord’s had a very successful strategy and a good growing footprint in the U.K. and Europe, and we’re excited to be a part of that,” he said. “We do think that that’s an area for further potential.”

Once the transaction closes, West Fraser shareholders will own about 56 per cent of the combined company, while current Norbord shareholders will own approximately 44 per cent.

The agreement has the backing of Brookfield Asset Management, which holds 43 per cent of Norbord’s shares.

“The scale, the market cap of the company and liquidity of the company gives all of our shareholders more options on where they want to put their money,” Ferris said.

Two of Norbord's current independent directors will join the West Fraser board once the deal is complete.

Ferris will continue as West Fraser's chief executive, while Norbord's Peter Wijnbergen will be appointed president of engineered wood, and be responsible for the company's OSB, plywood, particleboard, medium-density fibreboard and veneer operations.

Sean McLaren, West Fraser's vice-president of U.S. Lumber, will be appointed president of solid wood, and be responsible for all of the company's lumber operations.

The deal is subject to shareholder and regulatory approvals.

With files from The Canadian Press