Montreal, Quebec, Canada, 09 January 2007 — Domtar Inc. (TSX/NYSE: DTC) announced today that Canada's Competition Bureau has decided not to challenge the closing of the proposed combination of Domtar with Weyerhaeuser's fine paper and related businesses. The U.S. Department of Justice had made a similar decision on the transaction in October 2006 under the Hart-Scott-Rodino review process.

"We are very pleased with these decisions from Canadian and U.S. authorities," said Raymond Royer, Domtar's president and chief executive officer. "This was an essential condition to the transaction. This major step towards closing now enables us to seek approval from our shareholders and to start developing a plan to better meet the needs of customers across North America in a competitive marketplace," added Royer.

Other closing conditions include approvals from Investment Canada, and from Domtar shareholders at a special meeting to be held in February. The transaction is expected to close in the first quarter of 2007.

Domtar is the third largest producer of uncoated freesheet paper in North America. It is also a leading manufacturer of business papers, commercial printing and publication papers, and technical and specialty papers. Domtar manages according to internationally recognized standards 18 million acres of forestland in Canada and the United States, and produces lumber and other wood products. Domtar has 8500 employees across North America.