Domtar Inc. announces pricing of cash tender offer for Canadian Debentures



    TICKER SYMBOL
    UFS (NYSE, TSX)

    MONTREAL, Dec. 13 /CNW Telbec/ - Domtar Inc., a wholly owned subsidiary
of Domtar Corporation, announced today the Total Consideration payable under
the previously announced Offers to purchase for cash any and all of its
outstanding Canadian dollar denominated 10% Debentures due 2011 and 10.85%
Debentures due 2017. The terms of the Offers are more fully described in an
Offer to Purchase and Consent Solicitation Statement and related Letter of
Transmittal and Consent dated November 28, 2007.
    The Total Consideration for both series of Debentures was calculated as
of 2:00 p.m., Montreal time, on December 13, 2007 by reference to:
    
        (i)   an offer spread of 125 basis points over the yield to maturity
              on the 6.00% Government of Canada bond due June 2011 for the
              10% Debentures; and

        (ii)  an offer spread of 150 basis points over the yield to maturity
              on the 4.00% Government of Canada bond due June 2017 for the
              10.85% Debentures.

    Assuming an Early Consent Deadline of 5:00 p.m., Montreal time, on
December 17, 2007 and an Early Settlement Date of December 20, 2007, the Total
Consideration for:

        (i)   each $1,000 principal amount of 10% Debentures validly tendered
              and not withdrawn prior to the Early Consent Deadline, will be
              $1,143.83; and

        (ii)  each $1,000 principal amount of 10.85% Debentures validly
              tendered and not withdrawn prior to the Early Consent Deadline,
              will be $1,385.04.

    In each case, the Total Consideration includes an Early Consent Amount of
$30.
    Holders who validly deposit their Debentures under the Offers and deliver
their Consent to the Proposed Amendments after the Early Consent Deadline and
prior to the Expiration Time, which is currently scheduled to be 5:00 p.m.,
Montreal time, on January 3, 2008, unless extended or earlier terminated, will
only receive the Purchase Price, which is equal to the Total Consideration as
of the Final Settlement Date less the Early Consent Amount, and which will be
payable promptly after the Expiration Time on the Final Settlement Date.

    Assuming a Final Settlement Date of January 7, 2008, the Purchase Price
for:
        (i)   each $1,000 principal amount of 10% Debentures validly tendered
              after the Early Consent Deadline, will be $1,111.86; and

        (ii)  each $1,000 principal amount of 10.85% Debentures validly
              tendered after the Early Consent Deadline, will be $1,353.60.
              Domtar Inc. will also pay accrued and unpaid interest from the
              last interest payment date to, but not including, the
              applicable Settlement Date on those Debentures accepted for
              payment pursuant to the Offers.
    
    In connection with the Offers, certain Debentureholders who hold,
directly or indirectly, or exercise control or direction over, approximately
66.9% and 64.7% of the 10% Debentures and the 10.85% Debentures, respectively,
have entered into lock-up agreements with Domtar Inc. pursuant to which they
have agreed, subject to the terms and conditions contained therein, to
irrevocably deposit all of their Debentures and deliver their Consents on or
prior to the Early Consent Deadline in valid acceptance of the Offers and
Consent Solicitations.
    Scotia Capital has been retained by Domtar Inc. to act as Dealer Manager
and Solicitation Agent for the Offers and Consent Solicitations. Domtar Inc.
has also retained Georgeson Shareholder Communications Canada Inc. to act as
information agent and Computershare Investor Services Inc. to act as
depositary in connection with the Offers and the Consent Solicitations.
    For copies of the Offer to Purchase and Consent Solicitation Statement
and the related Letter of Transmittal and Consent please contact Georgeson at
1-888-605-8384. Holders of Debentures in bearer form are advised to contact
Computershare at 1-800-245-4053 for instructions regarding how to deposit
their Debentures. For further inquiries, please contact Scotia Capital at
416-863-7776 or 1-800-372-3930 (for U.S. residents).

    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), 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.

    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. Such risks, uncertainties, and other
factors include, but are not necessarily limited to, those set forth under the
captions "Forward-Looking Statements" and "Risk Factors" of the prospectuses
contained in the registration statement on Form S-4 filed with the SEC. We
disclaim any intention to, and undertake no obligation to, update or revise
any forward-looking statements contained in this press release.




For further information:

For further information: Media Relations: Michel A. Rathier, (514)
848-5103; Investor Relations: Pascal Bossé, (514) 848-5938

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Domtar Corporation

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DOMTAR INC.

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