Feb 05, 2007. /Lesprom Network/. Weyerhaeuser Company commenced on February 2 an offer to its shareholders for the exchange of some or all of their common shares of Weyerhaeuser and exchangeable shares of Weyerhaeuser Company Limited for shares of Domtar Corporation common stock. The exchange is expected to be tax-free to participating Weyerhaeuser shareholders for U.S. federal income tax purposes. As previously announced, Weyerhaeuser and Domtar Inc. entered into a definitive agreement on August 22, 2006 to combine Weyerhaeuser's fine paper business and related assets with Domtar Inc. to form Domtar Corporation. Under the terms of the offer, participating Weyerhaeuser shareholders will receive approximately $1.11 worth of Domtar Corporation common stock for each $1 of Weyerhaeuser shares tendered in the exchange offer, subject to a limit of 11.1442 shares of Domtar Corporation common stock per Weyerhaeuser share. The value of Weyerhaeuser shares and Domtar Corporation common stock will be calculated using the simple arithmetic averages of the daily volume-weighted average prices (VWAP) of Weyerhaeuser common shares and common shares of Domtar Inc., respectively, on the New York Stock Exchange on the last three trading days of the offer, unless the offer is subject to the mandatory extension described below. Weyerhaeuser estimates that approximately 281 000 000 shares of Domtar Corporation common stock will be offered in exchange for Weyerhaeuser common shares and exchangeable shares in the offer. Accordingly, the exchange offer will be subject to proration if the offer is over-subscribed, and the number of shares Weyerhaeuser accepts in the exchange offer may be less than the number of shares tendered. Morgan Stanley is acting as a financial advisor to Weyerhaeuser in connection with the transaction. Weyerhaeuser Company, one of the world's largest integrated forest products companies, was incorporated in 1900. In 2005, sales were $22.6 billion. It has offices or operations in 18 countries, with customers worldwide. Weyerhaeuser is principally engaged in the growing and harvesting of timber; the manufacture, distribution and sale of forest products; and real estate construction, development and related activities.