Client Work Detail

On August 23, 2006, Domtar Inc. announced the creation of the largest manufacturer and marketer of uncoated freesheet paper in North America and the second largest in the world. Domtar has signed a definitive agreement to combine with Weyerhaeuser's fine paper business and related assets. The new company, to be called Domtar, will have its Head Office in Montréal, Quebec, while the Headquarters of Operations will be in Fort Mill, South Carolina. The transaction was completed in March 2007.

Under the terms of the transaction, Weyerhaeuser's fine paper business, consisting of 10 primary pulp and paper mills (seven in the United States and three in Canada), converting, forming and warehousing facilities and two sawmills will be transferred into a newly formed company for stock and a cash payment of US$1.35 billion to be provided by the new company through borrowings under a credit facility. Weyerhaeuser will distribute the shares of the new company to its shareholders and Domtar will combine with the newly formed company to create the new Domtar and by way of a Canadian court approved plan arrangement. Under the arrangement, shareholders of Domtar will have the option of exchanging their Domtar common shares directly for new common shares of new Domtar (listed on the New York Exchange and on the Toronto Stock Exchange) of exchanging their Domtar common shares for exchangeable preferred shares of a Canadian subsidiary of new Domtar on a tax deferred basis (which will be traded on the Toronto Stock Exchange). The exchangeable shares are the economic equivalent of the common shares of the new Domtar, with equal dividend entitlement and voting rights at the level of the new Domtar.

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 combination is subject to approvals by the shareholders of Domtar by a special resolution, the Superior Court of Quebec, appropriate regulatory and other authorities, as well as customary closing conditions. The transaction is expected to close in the first quarter of 2007.

Domtar was represented by Ogilvy Renault with a team composed of Pierre Dagenais, Steve Kelly, David Millette, Francis Legault, Sol Sananes, Norman Steinberg, Ava Yaskiel (Corporate securities); Dany Assaf, Thierry Dorval, Julie Elmlinger, Benjamin Little (Anti-Trust); Jules Charette, Adrienne Oliver (Tax); Jane Bogaty, Peter Wiazowski( Banking); Karen Galpern and Ruth Wahl (Research and Strategy); Jean Bertrand and Alan Mark (Plan of Arrangement); Charles Hurdon, Louise Laplante and David Vincent (Employment and Labour).