IP enters into US$4.3B acquisition agreement with Temple-Inland, to acquire all outstanding stock for US$32/share, assume US$600M in debt; deal to close Q1 2012

Kendall Sinclair

MEMPHIS, Tennessee , September 6, 2011 (press release) – International Paper (NYSE:IP - News) and Temple-Inland Inc. (NYSE:TIN - News) today announced that they have entered into a definitive merger agreement under which International Paper will acquire all of the outstanding common stock of Temple-Inland for $32.00 per share in cash, plus the assumption of $600 million in Temple-Inland's year end debt. The total transaction value is approximately $4.3 billion.

The combination, which has been approved by the Boards of both companies, brings together two strong North American corrugated packaging businesses to create an even stronger company. It offers numerous benefits for the shareholders and customers of both companies, and is consistent with International Paper's focus on achieving and sustaining cost of capital returns throughout the cycle. The transaction is expected to be accretive to International Paper's shareholders in year one after closing. It is expected to close in the first quarter of 2012.

International Paper Chairman and CEO John Faraci said, "The strategic benefits of this combination are clear and we are pleased to be able to move forward on terms that are financially attractive for both sets of shareholders. Acquiring Temple-Inland enhances our ability to generate additional cash flow while maintaining our strong balance sheet. We look forward to working with the employees of Temple-Inland as we integrate our businesses and create an even stronger company with substantial benefits for our customers, employees and shareholders."

Temple-Inland Chairman and Chief Executive Officer Doyle R. Simons said, “This transaction creates value for both Temple-Inland and International Paper shareholders. The combined company will be positioned to be a leader in providing high quality products for its customers.”

The combination is expected to yield synergies of approximately $300 million annually within 24 months of closing, derived primarily from the areas of operations, freight, logistics, selling expense and overhead. The companies have a shared focus on low-cost mills, complementary converting systems and high levels of box integration – Temple-Inland's products and manufacturing facilities are an excellent strategic fit with International Paper's current offerings and facilities.

As contemplated by the merger agreement, International Paper will terminate its existing tender offer to acquire all of the outstanding common shares of Temple-Inland for $30.60 per share, and Temple-Inland will hold a special meeting of its stockholders to vote on the transaction. In addition to the approval of Temple-Inland's stockholders, the transaction is subject to customary closing conditions, including antitrust approvals.

Evercore Partners and UBS Investment Bank served as financial advisors to International Paper and Goldman, Sachs & Co. served as financial advisor to Temple-Inland. Debevoise & Plimpton LLP served as International Paper's legal counsel and Temple-Inland was advised by Wachtell, Lipton, Rosen & Katz.

Investor Webcast

The companies will host a webcast at 10:00 a.m. EDT/9:00 a.m. CDT today. All interested parties are invited to listen to the call live via International Paper's Internet site at http://www.internationalpaper.com by clicking on the Investors tab and going to the Presentations page. A replay of the webcast will also be available beginning approximately two hours after the call. Parties who wish to participate in the webcast via teleconference may dial +1 (706) 679-8242 or, within the U.S. only, (877) 316-2541 and ask to be connected to the International Paper/Temple-Inland Investor Call. The conference ID number is 97910369. Participants should call in no later than 9:45 a.m. EDT/8:45 a.m. CDT. An audio-only replay will be available for four weeks following the call. To access the replay, dial +1 (855) 859-2056 or, (404) 537-3406, and when prompted for the conference ID, enter 97910369.


About International Paper

International Paper (NYSE:IP - News) is a global paper and packaging company with manufacturing operations in North America, Europe, Latin America, Russia, Asia and North Africa. Its businesses include uncoated papers and industrial and consumer packaging, complemented by xpedx, the Company's North American distribution company. Headquartered in Memphis, Tennessee, the company employs about 59,500 people in more than 24 countries and serves customers worldwide. 2010 net sales were more than $25 billion. For more information about International Paper, its products and stewardship efforts, visit internationalpaper.com.

About Temple-Inland

Temple-Inland Inc. is a manufacturing company focused on corrugated packaging and building products. The fully integrated corrugated packaging operation consists of 7 mills and 59 converting facilities. The building products operation manufactures a diverse line of building products for new home construction, commercial and repair and remodeling markets. Temple-Inland's address on the World Wide Web is www.templeinland.com.

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