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Domtar Corporation to Sell Forest Products Business to EACOM Timber
Montreal, Quebec, Canada, 29 March 2010 -- /PRNewswire/ -- Domtar Corporation (NYSE/TSX: UFS) today announced that it has entered into an agreement to sell its forest products business to EACOM Timber Corporation (TSX-V: ETR; EACOM) for CAD 80 million plus elements of working capital estimated at CAD 30 to CAD 40 million. Domtar will receive 19% of the proceeds in shares of EACOM. The transaction is expected to close at the end of the second quarter of 2010, subject to material consents and customary closing conditions.

"Our forest products employees have demonstrated tremendous resilience throughout the years. Their sustained efforts to reduce costs and pursue the continuous improvement of operations have positioned the business well for the recovery," said John D. Williams, president and chief executive officer of Domtar Corporation.

"All Domtar forest products employees, and its management team currently led by Jean-François Mérette, will be transitioning to EACOM," Williams said. "EACOM will establish its headquarters in Montreal, Quebec, and will become one of the largest publicly-traded lumber producers in eastern Canada. The company will be a focused, well capitalized, standalone operation dedicated to the manufacturing of solid and value-added wood products."

The transaction includes five operating sawmills: Timmins, Nairn Centre, and Gogama in Ontario, and Val-d'Or and Matagami in Quebec; and two nonoperating sawmills: Ear Falls in Ontario and Ste-Marie in Quebec. The sawmills have approximately 3.5 million cubic meters of annual harvesting rights and a production capacity of close to 900 million board feet. Also included in the transaction is the Sullivan remanufacturing facility in Quebec and Domtar's interests in two investments: Anthony-Domtar Inc. and Elk Lake Planing Mill Limited.

"With this acquisition we pursue our vision of becoming a major softwood lumber producer and we look forward to integrating Domtar's leading wood products management team to ensure a smooth transition. We recognize that customers have choices in wood products suppliers, and we will work hard to secure their business, notably through our continued commitment to the FSC-certification," stated Rick Doman, president and chief executive officer of EACOM Timber Corporation.

EACOM Timber Corporation is a TSX-V listed company. It is a new entry into the forestry sector. EACOM currently owns one idle mill in Big River, Saskatchewan, which it acquired at the beginning of 2010.

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, and is also a manufacturer of papergrade, fluff, and specialty pulp. The company designs, manufactures, markets and distributes a wide range of business, commercial printing and publishing, 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 more than 10,000 people. To learn more, visit www.domtar.com.


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