Domtar signs Definitive Purchase and Sale Agreement for sale of Ottawa/Gatineau hydro assets

(All financial information is in CAD$, unless otherwise noted.)

TICKER SYMBOL
(NYSE: UFS) (TSX: UFS)

MONTREAL, June 13, 2012 /PRNewswire/ - Domtar Corporation (NYSE: UFS) (TSX: UFS) today announced the signing by its Canadian subsidiary, Domtar Inc. ("Domtar"), of a Definitive Purchase and Sale Agreement ("the agreement") for the sale of its hydro assets in Ottawa, Ontario and Gatineau, Québec for $45 million.  The purchaser is Energy Ottawa Inc. ("Energy Ottawa"), the renewable energy subsidiary of Hydro Ottawa Holding Inc.  The agreement with Energy Ottawa signed on April 4, 2012 is subject to customary closing conditions, including certain third party approvals, with closing expected by August 31, 2012.

The transaction includes Domtar's three power stations (21 MW of installed capacity), Domtar's water rights in the area, as well as the company's equity stake in the Chaudière Water Power Inc. (CWPI) ring dam consortium. Domtar currently has 12 workers operating its hydro assets in Ottawa/Gatineau and all employees are to become employees of a subsidiary of Energy Ottawa upon closing of the transaction.

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About Domtar
Domtar Corporation (NYSE: UFS) (TSX: UFS) designs, manufactures, markets and distributes a wide variety of fiber-based products including communication papers, specialty and packaging papers and adult incontinence products. The foundation of its business is a network of world class wood fiber converting assets that produce papergrade, fluff and specialty pulps. The majority of its pulp production is consumed internally to manufacture paper and consumer products. Domtar is the largest integrated marketer of uncoated freesheet paper in North America with recognized brands such as Cougar^®, Lynx^® Opaque Ultra, Husky^® Opaque Offset, First Choice^® and Domtar EarthChoice^®. Domtar is also a leading marketer and producer of a complete line of incontinence care products marketed primarily under the Attends^® brand name. Domtar owns and operates Ariva^TM, an extensive network of strategically located paper and printing supplies distribution facilities. In 2011, Domtar had sales of US$5.6 billion from nearly 50 countries. The Company employs approximately 9,100 people. To learn more, visit www.domtar.com.

SOURCE DOMTAR CORPORATION