U.S. forestry giant Louisiana-Pacific Corp. said it plans to buy Vancouver-based Ainsworth Lumber Co. Ltd. for $1.1 billion U.S., according to a joint statement by the two companies late Wednesday.

Louisiana-Pacific said it will pay $3.76 Canadian per share for all of the remaining common shares in the Canadian lumber company, resulting in an approximate 30 per cent premium over the company's closing price of $2.89 on Sept. 3.

Shares in Ainsworth closed up five Canadian cents, or 1.73 per cent, at $2.94 Wednesday on the Toronto Stock exchange

Louisiana-Pacific said the deal also means it will assume all of Ainsworth's debt.

"This is an excellent transaction that makes LP more valuable for our customers and our shareholders," said Louisiana-Pacific chief executive Curt Stevens in a statement.

"Ainsworth has very high quality assets and provides us with an expanded suite of strand-based products and technologies, additional access to key international growth markets, particularly in Asia, and enhanced scale and efficiencies in North America."

The companies said the deal has "unanimous support" from Ainsworth's board of directions, and from its largest shareholder — Brookfield Asset Management — which owns 54 per cent of Ainsworth's stocks.

The deal, which requires the approval of shareholders, will be voted on in a special meeting next month. It is also subject to regulatory approvals.

According to the statement, the combined companies generated approximately $2.5 billion U.S. in sales in the last 12 months ended June 30, on a pro forma basis.

"Louisiana-Pacific is saying all the right things. They are not talking about laying people off, they are talking about expanding in Canada, so it looks like a pretty reasonable acquisition," said James Brander, a professor at UBC's Sauder School of Business.

Doug Routledge, spokesman for the Council of Forest Industries, agreed.

"I think the Louisiana-Pacific announcement can definitely be seen as an indicator of improvement in the U.S. housing  market," he said. "The accessory to that is that its also an indication of confidence in the future of the B.C. forest industry itself."

Ainsworth is a leading Canadian manufacturer and marketer of oriented strand board, which is used in residential home construction. It has four manufacturing facilities located in Alberta, B.C. and Ontario.

With files from the CBC's Terry Donnelly