Buyer purports to terminate agreement relating to previously announced sale of Domtar's forest products business



    TICKER SYMBOL
    UFS (NYSE, TSX)

    MONTREAL, Oct. 11 /CNW Telbec/ - Domtar Inc., a subsidiary of Domtar
Corporation, has received a notice purporting to terminate the agreement,
announced on June 22, 2007, relating to the sale of Domtar's forest products
business. The alleged termination follows a written notice received by Domtar
on October 1, 2007 from the Minister of Natural Resources and Wildlife for the
province of Quebec purporting to revoke, effective September 14, 2007,
Domtar's forest license rights relating to the Grand-Remous and Malartic
sawmills.
    Domtar believes that the Minister's action is unlawful and Domtar will
vigorously defend its rights. A letter was delivered to the Minister on
October 3, 2007 demanding that the decision be revoked and the licenses be
reinstated. Domtar intends to file formal proceedings before the Quebec
Superior Court to enforce its rights.
    Domtar also believes that the purported unilateral termination of the
agreement relating to the forest products business by Conifex Inc. is invalid
pursuant to the terms of the agreement. While the consent of the Minister to
the transfer of Grand-Remous, Malartic and other forest license rights is a
condition to the closing of the transaction, the buyer would only have the
right to terminate the agreement as of December 31, 2007 in the event that
Domtar was not successful in challenging the revocation of these licenses and
obtaining such consent by that date. Domtar intends to vigorously enforce all
of its rights under the agreement and continue to work diligently towards a
closing of this transaction.

    Forward Looking Statements

    All statements in this press release that are not based on historical
fact are "forward-looking statements". While management has based any
forward-looking statements contained herein on its current expectations, the
information on which such expectations were based may change. These
forward-looking statements rely on a number of assumptions concerning future
events and are subject to a number of risks, uncertainties, and other factors,
many of which are outside of our control, that could cause actual results to
materially differ from such statements. Accordingly, investors should not
place any reliance on forward-looking statements as a prediction of actual
results. We disclaim any intention to, and undertake no obligation to, update
or revise any forward- looking statements contained in this press release.

    Domtar Corporation (NYSE/TSX: UFS) is the largest integrated producer of
uncoated freesheet paper in North America and the second largest in the world
based on production capacity, and is also a manufacturer of papergrade pulp.
The Company designs, manufactures, markets and distributes a wide range of
business, commercial printing, publication as well as technical and specialty
papers with recognized brands such as First Choice(R), Microprint(R), Windsor
Offset(R), Cougar(R) as well as its full line of environmentally and socially
responsible papers, EarthChoice(R). Domtar owns and operates Domtar
Distribution Group, an extensive network of strategically-located paper
distribution facilities. Domtar also produces lumber and other specialty and
industrial wood products. The Company employs nearly 14,000 people. To learn
more, visit www.domtar.com.




For further information:

For further information: MEDIA RELATIONS: Michel A. Rathier,
Vice-President, Corporate Communications, (514) 848-5103,
michel.rathier@domtar.com; INVESTOR RELATIONS: Nicholas Estrela, Conseiller,
Relations avec les investisseurs, (514) 848-5555, # 85979,
nicholas.estrela@domtar.com

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Domtar Corporation

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DOMTAR INC.

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