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Tembec Announces Impending Divestiture of Pulp Mills in France
Temiscaming, Quebec, Canada, 01 April 2010 – Tembec today announced that its European subsidiary, Tembec SAS, is in advanced negotiations with Paper Excellence B.V. for the sale of two kraft pulp mills in Tarascon and Saint-Gaudens, France. This potential transaction would be the culmination of a process first announced in November of 2009.

As currently proposed, Paper Excellence B.V. would acquire 100% of the shares of Tembec Saint-Gaudens SAS and Tembec Tarascon SAS, two subsidiaries of Tembec SAS. The total consideration for the proposed transaction would be approximately EUR 100 million (CAD 137 million) allocated as between shares and assumption of debt, subject to closing working capital adjustments.

Because of the advanced nature of the negotiations, Tembec SAS has initiated the process of consultation with mill employee committees, as required under French law. Tembec SAS expects to finalize the transaction shortly after the consultation process is complete.

“This contemplated transaction is consistent with the strategic plan launched by the company following the February 2008 recapitalization of our balance sheet and, in our view, represents fair value for these assets,” said James Lopez, president and CEO of Tembec.

Tembec is a large, diversified and integrated forest products company and a global leader in sustainable forest management practices. The company’s principal operations are located in Canada and France. Tembec’s common shares are listed on the Toronto Stock Exchange under the symbol TMB and warrants under TMB.WT. Additional information on Tembec is available at www.tembec.com.

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