Avery Dennison to Acquire Paxar for $1.3 Billion or $30.50 Per Share





    --  Enhances Growth Potential in Untapped Markets, Including Asia

    --  Projected Annualized Cost Synergies of $90 - $100 Million

    --  Accretion to EPS, Excluding Integration-Related Charges, Expected in
12 Months Following Close

    PASADENA, CALIF. & WHITE PLAINS, N.Y., March 22 /CNW/ - Avery Dennison
Corporation (NYSE:   AVY) and Paxar Corporation (NYSE:   PXR) today announced that
their boards of directors have unanimously approved a definitive agreement for
Avery Dennison to acquire all outstanding shares of Paxar for $30.50 per share
in a cash transaction valued at approximately $1.34 billion. The transaction
is expected to enhance Avery Dennison's ability to compete and grow in the
fragmented, expanding $15 billion-plus global retail information and brand
identification market.

    "This combination is a terrific strategic fit," said Dean A. Scarborough,
president and chief executive officer of Avery Dennison. "Paxar's highly
complementary capabilities advance our strategy to deliver exceptional
products and superior service to customers at every level of the global retail
supply chain, and to increase efficiency and reduce costs in a rapidly
changing and increasingly competitive global marketplace. In addition, this
acquisition will allow us to invest in product innovation and services that
will serve our existing customers even better."

    Avery Dennison's Retail Information Services (RIS) business represents
one of its fastest-growing units. RIS provides brand identification and supply
chain management solutions primarily for manufacturers and retailers,
including tag and label design and printing; inventory and shipment tracking;
and data management systems.

    "This combination will give us the capabilities, products and geographic
reach to pursue new segments of the global retail information and brand
identification market. These segments include retailers and manufacturers
serving local customers in India and China," said Mr. Scarborough.

    "Combining with Avery Dennison provides substantial benefits to our
customers while delivering compelling value to Paxar shareholders," added Rob
van der Merwe, chairman, president and chief executive officer of Paxar
Corporation. "In particular, the broader capabilities of the combined Company
will better meet customer demands for improved quality, product innovation and
speed of delivery. Although we understand that some jobs will be affected
through the integration of our businesses, employees of the combined Company
will have expanded opportunities as part of a larger organization."

    Customer Benefits

    In this evolving marketplace, it is increasingly important to be close to
the local manufacturing clusters, the two companies said. With their
complementary geographic footprints, in particular with Paxar's greater focus
on Europe, the acquisition improves the combined Company's ability to serve
customers in Europe, Latin America, the Middle East and Asia.

    "Lower-cost production - and higher levels of quality and speed of
delivery - will be crucial for winning against the local and regional
competition we face at the buying office and factory levels," said Mr.
Scarborough. "This combination will benefit the factories that purchase our
tickets and tags as well as the retailers and the brand owners they supply."

    Financial Terms

    Under the terms of the agreement, Avery Dennison will purchase each
common share of Paxar for $30.50. Based upon Paxar's closing price of $24.03
on Thursday, March 22, 2007, this represents a premium of 27 percent. JPMorgan
Chase Bank, N.A. has committed $1.35 billion in acquisition financing and will
also arrange long-term financing.

    Cost Savings/Accretion

    Avery Dennison expects approximately $90 to $100 million in annual cost
savings, with similar infrastructure enabling the elimination of redundant
production costs and reductions in selling, general and administrative
expenses, including corporate overhead and back office support. Avery Dennison
currently estimates that there will be integration costs, including
restructuring and asset impairment charges ranging from $100 to $125 million,
plus information technology (IT) integration costs and other IT investments of
at least $50 million. Excluding these costs, the transaction is expected to
turn accretive to earnings per share within one year following the close of
the transaction. Avery Dennison management has a successful track record of
integrating international acquisitions and achieving significant cost
synergies. Avery Dennison expects to realize its targeted savings within 24
months following the close of the transaction.

    Integration

    The two companies will develop an integration plan that retains the best
systems and people from both organizations.

    "While there will be a reduction in overlapping positions, employees will
be part of a stronger, more rapidly growing global business," said Mr.
Scarborough. "We plan on retaining top-notch talent to ensure that we are the
best in the industry."

    Closing Terms and Conditions

    The transaction is expected to close by year-end and is subject to Paxar
shareholder approval, as well as regulatory approvals in the U.S. and other
countries.

    J.P. Morgan Securities Inc. acted as exclusive financial advisor to Avery
Dennison, and Wachtell Lipton Rosen & Katz and Latham & Watkins LLP acted as
legal advisors. Goldman, Sachs & Co. acted as exclusive financial advisor to
Paxar, and Kirkland & Ellis LLP acted as legal counsel.

    Web Cast of Conference Call

    Avery Dennison and Paxar will host a Web cast to discuss this
announcement. The Web cast will be held Friday, March 23 at 8:30 a.m. Eastern
Daylight Saving Time (EDT). A web cast of the call will be accessible on Avery
Dennison's website (www.investors.averydennison.com) and Paxar's website
(www.paxar.com).

    The web cast and handout will be archived on Avery Dennison's website.

    About Avery Dennison Corporation

    Avery Dennison is a global leader in pressure-sensitive labeling
materials, office products and retail tag, ticketing and branding systems.
Based in Pasadena, Calif., Avery Dennison is a FORTUNE 500 Company with 2006
sales of $5.6 billion. Avery Dennison employs more than 22,000 individuals in
49 countries worldwide who apply Avery Dennison's technologies to develop,
manufacture and market a wide range of products for both consumer and
industrial markets. Products offered by Avery Dennison include Avery brand
office products and graphics imaging media, Fasson brand self-adhesive
materials, peel-and-stick postage stamps, reflective highway safety products,
labels for a wide variety of automotive, industrial and durable goods
applications, brand identification and supply chain management products for
the retail and apparel industries, and specialty tapes and polymers.

    About Paxar Corporation

    Paxar is a global leader in providing identification solutions to the
retail and apparel industry, worldwide. Paxar's leadership in brand
development, merchandising, information services and supply chain solutions
enables Paxar to satisfy customer needs around the world.

    "Safe Harbor" Statement under the Private Securities Litigation Reform
Act of 1995:

    This news release contains forward-looking statements within the meaning
of the "safe harbor" provisions of the Private Securities Litigation Reform
Act of 1995, including statements about Avery Dennison's anticipated
acquisition of Paxar and statements about projected future financial and
operating results. These statements are based on current expectations and
beliefs and are subject to a number of risks, uncertainties and assumptions
that could cause actual results to differ materially from those described in
the forward-looking statements.

    All statements other than statements of historical fact are statements
that could be deemed forward-looking statements.

    Risks, Uncertainties and Assumptions - Avery Dennison

    Risks, uncertainties, and assumptions pertaining to Avery Dennison
include, but are not limited to, the impact of economic conditions on
underlying demand for the Company's products; the impact of competitors'
actions, including expansion in key markets, product offerings and pricing;
the degree to which higher raw material and energy-related costs can be passed
on to customers through selling price increases (and previously implemented
selling price increases can be sustained), without a significant loss of
volume; potential adverse developments in legal proceedings and/or
investigations, including those regarding competitive activities, and
including possible fines, penalties, judgments or settlements; the ability of
Avery Dennison to achieve and sustain targeted cost reductions; credit risks;
ability to obtain adequate financing arrangements; changes in governmental
regulations; foreign currency exchange rates and other risks associated with
foreign operations; impact of war, terror, natural disasters and
epidemiological events on the economy and Avery Dennison's customers and
suppliers; successful integration of acquisitions; financial condition and
inventory strategies of customers; changes in customer order patterns; loss of
significant contract(s) or customer(s); timely development and market
acceptance of new products; fluctuations in demand affecting sales to
customers; and other matters referred to in Avery Dennison's SEC filings.

    Risks, Uncertainties and Assumptions - Paxar

    Risks, uncertainties and assumptions pertaining to Paxar include, but are
not limited to, the ability of Paxar to achieve and sustain targeted cost
reductions, for example, those related to its global apparel realignment plan
and other restructuring/reorganization initiatives; changes in foreign
currency exchange rates; political or economic instability in Paxar's major
markets; the impact of competitive products and pricing; fluctuations in cost
and availability of petroleum-based raw materials; fluctuations in retail and
apparel industry demand affecting sales to customers; and other matters
referred to in Paxar's SEC filings.

    Risks, Uncertainties and Assumptions - The Transaction

    Forward looking statements pertaining to Avery Dennison's acquisition and
integration of Paxar include statements relating to or of expected synergies,
cost savings, accretion, timing, industry size, execution of integration plans
and management and organizational structure. Risks, uncertainties and
assumptions pertaining to the transaction include the possibility that the
market for and development of certain products and services may not proceed as
expected; that the Paxar acquisition does not close or that the companies may
be required to modify aspects of the transaction to achieve regulatory
approval; that prior to the closing of the proposed acquisition, the
businesses of the companies suffer due to uncertainty or diversion of
management attention; that the parties are unable to successfully execute
their integration strategies, or achieve planned synergies and cost
reductions, in the time and at the cost anticipated or at all; acquisition of
unknown liabilities; effects of increased leverage; and other matters that are
referred to in the parties' SEC filings.

    For a more detailed discussion of these and other factors, see "Risk
Factors" and "Management's Discussion and Analysis of Results of Operations
and Financial Condition" in Avery Dennison's and Paxar's reports on Form 10-K
both of which were filed on February 28, 2007 with the SEC.

    Forward-looking statements included in this news release are made only as
of the date of this news release, and the companies undertake no obligation to
update the forward-looking statements to reflect subsequent events or
circumstances except as may be required by law.




For further information:

For further information: Avery Dennison Corporation: Media Relations:
Laurence J. Dwyer, 626-304-2014 communications@averydennison.com or The
Abernathy MacGregor Group Ian D. Campbell / Whitney L. Hays, 213-630-6550 Tom
Johnson, 212-371-5999 or Investor Relations: Cynthia S. Guenther, 626-304-2204
investorcom@averydennison.com or Paxar Corporation: Media: Sard Verbinnen & Co
David R. Reno / Brooke A. Morganstein, 212-687-8080 or Investor Relations:
Robert M. Powers, 914-697-6862

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AVERY DENNISON CORPORATION

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