Montreal, Quebec, Canada, 11 March 2009 -- /PRNewswire/ -- Domtar Corporation announced today that its board of directors has approved a proposal to effect a reverse stock split of the company's outstanding common stock (NYSE/TSX: UFS) and a corresponding reverse split of the outstanding exchangeable shares issued by the company's indirect subsidiary, Domtar (Canada) Paper Inc. (TSX: UFX).

The proposal calls to authorize the board to effect, at its discretion, a reverse stock split by a ratio of 1-for-12, 1-for-15, or 1-for-18 shares. The proposal is outlined in the company's preliminary proxy statement filed today with the Securities and Exchange Commission and Canadian securities regulators. It will be submitted to a vote by stockholders at the company's annual meeting on 29 May 2009. The reverse stock split is also subject to certain customary regulatory approvals.

Domtar Corporation (NYSE/TSX:UFS) is the largest integrated manufacturer and marketer of uncoated freesheet paper in North America and the second largest in the world, based on production capacity. The company also manufactures papergrade, fluff, and specialty pulp. The company designs, manufactures, markets, and distributes a wide range of business, commercial printing, publication, converting, and specialty 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 11,000 people. To learn more, visit www.domtar.com.