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

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.