Domtar Inc. transfers shares of U.S. subsidiaries to Domtar Corporation

Montreal, November 23, 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 as well as technical and specialty papers with recognized brands such as First Choice®, Domtar Microprint®, Windsor Offset®, Cougar® as well as its full line of environmentally and socially responsible papers, Domtar EarthChoice®. 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

All statements in this press release that are not based on historical fact are "forward-looking statements". While management has based any forward-looking statements contained herein on its current expectations, the information on which such expectations were based may change. These forward-looking statements rely on a number of assumptions concerning future events and are subject to a number of risks, uncertainties, and other factors, many of which are outside of our control that could cause actual results to materially differ from such statements. Such risks, uncertainties, and other factors include, but are not necessarily limited to, those set forth under the captions “Forward-Looking Statements” and "Risk Factors" of the prospectuses contained in the registration statement on Form S-4 filed with the SEC. We disclaim any intention to, and undertake no obligation to, update or revise any forward-looking statements contained in this press release.

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