Weyerhaeuser to Combine Fine Paper Business With Domtar

FEDERAL WAY, WA—Aug. 23, 2006—Weyerhaeuser Company (NYSE: WY) today announced that it has reached a definitive agreement to combine its Fine Paper business and related assets with Domtar Inc. (TSE/NYSE: DTC). The transaction gives Weyerhaeuser shareholders 55 percent ownership in the new company and includes a $1.35 billion cash payment to Weyerhaeuser. The cash payment, plus the stock valued at the closing price of Domtar stock on Aug. 22, 2006, results in a transaction value of $3.3 billion before considering resulting synergies.The transaction, which has been approved by the boards of directors of both companies, is expected to close in the first quarter of 2007.