BUZZ-Norbord Inc: To buy smaller rival
** Wood-based panel maker's shares up 3.1 pct at C$24.70; Smaller rival Ainsworth Lumber Co Ltd's up 7.4 pct at C$3.20
** Canada-based Norbord says will buy Ainsworth for C$762.6 million ($667 million); To become world's biggest producer of oriented strand boards (OSB)
** OSB - cheaper than plywood - are most popular roofing material in the United States; Used in flooring and wall sheathing too
** Deal to help Norbord take advantage of any recovery in U.S. housing market, cater to rising demand from Europe, Asia
** U.S. rival Louisiana-Pacific Corp, which tried to buy Ainsworth earlier this year and reported a bigger-than-expected loss last month, up 11 pct
** Up to Friday's close, Norbord's shares had fallen 29 pct this year, while Ainsworth shares lost 28.5 pct of value
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