Domtar Inc. Transfers Shares of U.S. Subsidiaries to Domtar Corporation

Montreal, Quebec, Canada, 23 November 2007 – Domtar Inc., a wholly-owned subsidiary of Domtar Corporation, announced today the transfer of approximately 41% of shares of the capital stock of its U.S. subsidiaries to Domtar Corporation. This transaction follows the completion of Domtar Corporation’s previously announced offers to exchange Domtar Inc.’s outstanding U.S. dollar denominated notes for an equal principal amount of Domtar Corporation’s newly issued notes of the corresponding series.

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