Domtar closes transaction with Weyerhaeuser creating North American leader in fine paper



    TICKER SYMBOL
    UFS (NYSE, TSE)

    MONTREAL, March 7 /CNW Telbec/ - Domtar Inc. announced today the
completion of the previously announced transaction to combine with
Weyerhaeuser Company's Fine Paper business and related assets, creating Domtar
Corporation. Domtar Corporation is the largest manufacturer and marketer of
uncoated freesheet paper and a leading manufacturer of market pulp in North
America. The Company's Head Office is located in Montreal, Quebec and its
Operations Center is in Fort Mill, South Carolina.
    "With a strong team of nearly 14,000 employees dedicated to creating
value for customers and shareholders, a world-class manufacturing capability
and a solid financial position, Domtar becomes the North American leader in
the fine paper business," said Raymond Royer, President and Chief Executive
Officer of Domtar Corporation. "The combination of knowledge and expertise in
the design, manufacturing, marketing and distribution of fine paper gives the
Company, which will benefit from its efficient assets located across the
United States and Canada, clear competitive advantages in the breadth and
quality of products and services we offer. We will provide long-term value to
our shareholders, customers and employees, within an industry in rapid
consolidation."
    Marvin Cooper, Executive Vice-President and Chief Operating Officer,
added: "Domtar is built on a solid foundation of rigorous leadership,
established brands and recognized service solutions. We will focus our efforts
on meeting the needs of customers and ensuring a quick and seamless transition
to the new organization. Also, with an experienced management team with proven
integration expertise, we will review all our operations to determine how best
to execute the synergies resulting from the transaction."

    Trading

    Commencing today, Domtar Corporation common stock will be traded on the
New York Stock Exchange and the Toronto Stock Exchange under the ticker symbol
"UFS". Also, exchangeable shares of Domtar (Canada) Paper Inc. will be traded
on the Toronto Stock Exchange under the ticker symbol "UFX". As a result of
the transaction, the common shares of Domtar Inc. traded under the ticker
symbol "DTC" have been delisted from both exchanges while preferred shares of
Domtar Inc. will continue to be traded on the Toronto Stock Exchange.

    The new company

    The backbone of the new company consists of six highly efficient
world-class uncoated freesheet mills that provide two-thirds of its nearly
five million tons of annual capacity. These mills, combined with a solid mix
of specialty facilities, make the new company one of the most efficient and
cost-competitive paper companies in North America. The Company has broad North
American reach and a wide range of well-known business and commercial printing
paper brands. With its access to volume, depth of product offerings, and
service through a wide geographic footprint, the Company is in a position to
meet the needs of large and small customers alike throughout the United States
and Canada. It will maintain environmental leadership, notably by expanding
its environmentally and socially responsible papers such as the Domtar
EarthChoice(R) product line. (For more details on the new company, see the
"Domtar at a glance" factsheet issued with this news release.)

    Forward-looking statements

    This release and other materials we have filed or will file with the SEC
(as well as information included in our other written or oral statements)
contain, or will contain, disclosures which are "forward-looking statements."
Forward-looking statements include all statements that do not relate solely to
historical or current facts, and can generally be identified by the use of
words such as "may," "believe," "will," "expect," "project," "estimate,"
"anticipate," "plan," "continue" or similar expressions. These forward-looking
statements address, among other things, the anticipated effects of the
transactions. These forward-looking statements are based on the current plans
and expectations of our management and are subject to certain risks and
uncertainties that could cause actual results to differ materially from
historical results or those anticipated. Accordingly, no assurances can be
given that any of the events anticipated by the forward-looking statements
will occur, or if any of them occurs, what effect they will have on the
Combined Company's results of operations or financial condition. These factors
include, but are not limited to: (i) the effect of general economic
conditions, particularly in the United States and Canada, (ii) market demand
for the Combined Company's products, which may be tied to the relative
strength of various U.S. and/or Canadian business segments, (iii) energy
prices, (iv) raw material prices, (v) chemical prices, (vi) performance of the
Combined Company's manufacturing operations including unexpected maintenance
requirements, (vii) the successful integration of the Weyerhaeuser Fine Paper
Business with Domtar and the execution of internal performance plans, (viii)
the level of competition from domestic and foreign producers, (ix) the effect
of forestry, land use, environmental and other governmental regulations, and
changes in accounting regulations, (*) the effect of weather and the risk of
loss from fires, floods, windstorms, hurricanes and other natural disasters,
(xi) transportation costs, (xii) the loss of current customers or the
inability to obtain new customers, (xiii) legal proceedings, (xiv) changes in
asset valuations, including writedowns of property, plant and equipment,
inventory, accounts receivable or other assets for impairment or other
reasons, (xv) changes in currency exchange rates, particularly the relative
value of the U.S. dollar to the Canadian dollar, (xvi) the effect of timing of
retirements and changes in the market price of Company common stock on charges
for stock-based compensation, (xvii) performance of pension fund investments
and related derivatives and (xviii) the other factors described under "Risk
Factors" in our Form 10 Registration Statement. You are cautioned not to
unduly rely on such forward-looking statements, which speak only as of the
date made. We assume no obligation to update or revise these forward-looking
statements to reflect new events or circumstances.

    Domtar Corporation

    Domtar Corporation (NYSE/TSX: UFS) is the largest integrated producer of
uncoated freesheet paper and one of the largest manufacturers of papergrade
market pulp in North America. 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), Domtar Microprint(R), Windsor Offset(R), Cougar(R) as well as its
full line of environmentally and socially responsible papers, Domtar
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.

    Domtar at a glance: http://files.newswire.ca/514/fact.sheet.pdf




For further information:

For further information: MEDIA RELATIONS: Christian Tardif, Senior
Manager, Corporate and Financial Communications, (514) 848-5515,
christian.tardif@domtar.com; INVESTOR RELATIONS: Pascal Bossé, Manager
Investor Relations, (514) 848-5938, pascal.bosse@domtar.com

Organization Profile

DOMTAR INC.

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