(Reuters) - Canadian lumber producer Interfor Corp said on Monday it will buy Chaleur Forest Products for C$325 million ($236.40 million), as it looks to boost presence in the New Brunswick province.
The deal comes as lumber prices slide from soaring levels touched earlier this year, when Russia banned forestry product exports to the West — a retaliation against Western sanctions imposed over it for invading Ukraine.
Interfor said it will add two sawmills to its portfolio through the all-cash purchase with a combined annual lumber production capacity of 350 million board feet. It will also gain a woodlands management division based in Miramichi that manages about 30% of the total Crown forest in New Brunswick.
"New Brunswick has a secure, high quality and competitive log supply, a supportive investment environment and proximity to key eastern markets," said Interfor Chief Executive And President Ian Fillinger.
Interfor also said it expects its total annual lumber production capacity to increase to 5.1 billion board feet on a proforma basis, of which 44% will be in the U.S. South, 19% in Eastern Canada, 15% in the U.S. Northwest, 15% in British Columbia and 7% in Atlantic Canada.
($1 = 1.3748 Canadian dollars)
(Reporting by Ankit Kumar; editing by Uttaresh.V)