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Weyerhaeuser, Domtar close Fine Papers deal

March 7, 2007 (Press Release) - Weyerhaeuser Company today announced the results of its exchange offer and the closing of its transaction to combine its Fine Paper business and related assets with Domtar Inc.

The transaction creates a new company called Domtar Corporation.

Under the terms of the transaction, Weyerhaeuser received $1.35 billion in cash and distributed ownership of its Fine Paper business and related assets to Weyerhaeuser shareholders in the exchange offer.

"The completion of this transaction generates significant value for Weyerhaeuser shareholders," said Steven R. Rogel, chairman, president and chief executive officer. "Our focus is to continue to execute strategies that will drive additional value for our shareholders."

Exchange Offer

Pursuant to the exchange offer, which expired at midnight on March 6, 2007, Weyerhaeuser announced today that it has accepted a total of 25,490,196 common shares of Weyerhaeuser Company and exchangeable shares of Weyerhaeuser Company Limited exchange for 284,067,852 shares of Domtar Corporation common stock.

Under the terms of the exchange offer, 11.1442 shares of Domtar Corporation common stock will be exchanged for each Weyerhaeuser common share and exchangeable share accepted for exchange in the offer.

According to the exchange agent and the Canadian depositary for the offer, a total of 116,470,356 Weyerhaeuser common shares and exchangeable shares were validly tendered and not withdrawn prior to the expiration of the exchange offer, including 62,236,630 shares tendered pursuant to guaranteed delivery procedures. The total shares tendered include 181,122 Weyerhaeuser shares tendered by odd lot shareholders not subject to proration.

Because more than 25,490,196 Weyerhaeuser shares have been tendered, the exchange of shares of Domtar Corporation for Weyerhaeuser shares will be subject to proration. Based on the total number of Weyerhaeuser shares reported to be tendered prior to the expiration of the exchange offer, it is estimated that approximately 21.76 percent of the Weyerhaeuser common shares and Weyerhaeuser exchangeable shares validly tendered will be accepted for exchange. Unexchanged shares will be returned to tendering shareholders.

Weyerhaeuser will not be able to determine the final proration factor until the delivery of Weyerhaeuser shares tendered by guaranteed delivery is completed, which may be the close of business on March 9, 2007. Weyerhaeuser will publicly announce the final proration factor after it has been determined, which may be different than today's estimate.

Under terms of the offer, fractional shares of Domtar Corporation common stock will not be exchanged. Instead, fractional shares will be aggregated and sold, and the net cash proceeds of such sale will be distributed to tendering shareholders with fractional interests.

Because more than 25,490,196 Weyerhaeuser common shares and exchangeable shares were tendered, all shares of Domtar Corporation common stock owned by Weyerhaeuser will be exchanged in the exchange offer, and no Domtar Corporation shares will be distributed as a pro rata dividend to Weyerhaeuser shareholders.

Closing of Transaction

Weyerhaeuser today also announced the completion of the contribution of its Fine Paper business to Domtar Corporation and the effectiveness of the plan of arrangement between Domtar Corporation and Domtar Inc.

Domtar Corporation (NYSE/TSE: UFS) common stock has been approved for listing on the New York Stock Exchange and the Toronto Stock Exchange. It is anticipated that trading on such exchanges on a when-distributed basis will begin today.

SOURCE: Weyerhaeuser Corp.




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