Domtar Corporation

Domtar Corporation announces 2-for-1 stock split and dividend increase

Domtar Corporation (NYSE: UFS) (TSX: UFS) today announced that its Board of Directors has approved a 2-for-1 split of its common stock (NYSE: UFS) (TSX: UFS) to be effected through a stock dividend. Shareholders on the record date of June 10, 2014 will be entitled to receive one additional share for every share they own on that date. The Company's transfer agent, Computershare, will distribute the new shares of common stock on or about June 17, 2014. As a result of the stock split, total shares of Company common stock outstanding will increase from approximately 32.5 million to 65 million.

In addition, the Company announced an increase in the quarterly dividend on its common stock, on a post-split basis, from $0.275 per share to $0.375 per share. This is equivalent to, on a pre-split basis, an increase of $0.20 per share per quarter.

"The Board's decision to substantially increase the regular dividend payout reflects its confidence in our future as we continue to transform Domtar into a growth company," said John D. Williams, President and Chief Executive Officer. "The acquisition of Indas earlier this year was an important step, bringing critical mass to Personal Care and enhancing the earnings growth potential of this key division. At the same time, the implementation of a stock split complements our new dividend policy and enables us to maintain a share price that is attractive to a broad range of investors," added Mr. Williams.

The Board of Directors declared the quarterly dividend payable on July 15, 2014 to stockholders of record as of the close of business on July 2, 2014.

As previously announced, the Company's subsidiary Domtar (Canada) Paper Inc. (TSX: UFX) will redeem all of its outstanding exchangeable shares on or about June 2, 2014. As a result, the exchangeable shares will cease to be outstanding and the shares of Company common stock issued in exchange for the exchangeable shares will participate in the 2-for-1 stock split and all these shares will be entitled to receive the quarterly dividend.

The Company held its Annual Meeting of Stockholders today at 9:00 a.m. (ET).

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