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Domtar Inc. Announces Offer to Purchase Debentures
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Montreal, Quebec, Canada, 29 November 2007 – Domtar Inc., a wholly owned subsidiary of Domtar Corporation, announced today that it has commenced offers to purchase for cash from holders, any and all of its outstanding Canadian dollar denominated 10% Debentures due 2011 and Canadian dollar denominated 10.85% Debentures due 2017.

In conjunction with the Offers, Domtar Inc. is also soliciting Consents to certain proposed amendments to the indentures under which each series of Debentures were issued. The Offers and Consent Solicitations are being made pursuant to an Offer to Purchase and Consent Solicitation Statement and the related Letter of Transmittal and Consent mailed to holders today which more fully set forth the terms and conditions thereof.

The Offers will expire at the Expiration Time which is 5:00 p.m., EAstern Time, on 03 January 2008, unless extended or earlier terminated. Holders of Debentures must validly deposit their Debentures under the Offers and deliver their Consent to the Proposed Amendments prior to the Early Consent Deadline which is 5:00 p.m., Eastern Time, on 17 December 2007, unless extended or earlier terminated, to receive the Total Consideration.

The Total Consideration offered is an amount, paid in cash, to result, as of the applicable Settlement Date, in a yield to maturity (for each series of Debentures) equal to the sum of (i) a Reference Yield, being the yield to maturity of the relevant reference Government of Canada bonds, and (ii) an Offer spread of 125 basis points for the 10% Debentures and 150 basis points for the 10.85% Debentures as set out in more detail in the Offer and Consent Solicitation Statement.

The Total Consideration will be payable promptly on an Early Settlement Date (currently expected to be 20 December 2007) elected by Domtar Inc. upon the satisfaction of certain specified conditions following the Early Consent Deadline or, if Domtar Inc. does not elect an Early Settlement Date, on the Final Settlement Date (currently expected to be 07 January 2008) subject to the terms and conditions of the Offers. Domtar Inc. reserves the right, at its sole discretion, to extend or forgo the Early Settlement Date.

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 will only receive the Purchase Price, which is equal to the Total Consideration less an Early Consent Amount of CAD 30.00 per CAD 1000 principal amount of Debentures, and which will be payable promptly after the Expiration Time on the Final Settlement Date.

Scotia Capital has been retained by Domtar Inc. to act as Dealer Manager and Solicitation Agent for the Offers and Consent Solicitations.

The Total Consideration and Purchase Price will be calculated by the Dealer Manager in accordance with standard market practice based on the Reference Yield on the date that is two business days before the Early Consent Deadline (currently expected to be 13 December 2007) for settlement on the applicable Settlement Date.

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 the 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.

In addition to retaining Scotia Capital as Dealer Manager and Solicitation Agent, Domtar Inc. has 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 further inquiries, contact Scotia Capital at 416-863-7257 or 1-800-372-3930 (for U.S. residents). 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.

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, technical, and specialty papers, as well as a full line of environmentally and socially responsible papers. 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


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