Montreal, Quebec, Canada, 12 May 2011 -- /PRNewswire/ -- Domtar Corporation (NYSE: UFS) (TSX: UFS) today announced that it entered into an accelerated share repurchase (ASR) agreement with a third party. Under the ASR agreement, the company is repurchasing CAD 150 million of its common stock with available cash on hand. This ASR agreement was entered into pursuant to the company's CAD 600 million share repurchase program announced on 04 May 2011.

Under the ASR agreement, the company will pay CAD 150 million to the third party in exchange for an initial delivery of 1,294,840 shares. The final number of shares to be repurchased under the ASR agreement generally will be based on a discount to the daily volume-weighted average prices of the company's common stock during the valuation period of the ASR, which can vary from one to three months. The resulting adjustment might affect the total amount expended by the company or the aggregate number of shares it repurchases.

Domtar Corporation is the largest integrated manufacturer and marketer of uncoated freesheet paper in North America and the second largest in the world, based on production capacity. The company manufactures papergrade, fluff, and specialty pulp. The company also designs, manufactures, markets, and distributes a wide range of business, commercial printing, publishing, converting, and specialty papers. Domtar owns and operates an extensive network of strategically located paper distribution facilities. The company employs approximately 8,500people. To learn more, visit www.domtar.com.