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International Paper and Temple-Inland Reach Merger Agreement

Memphis, Tennessee, USA, 06 September 2011 -- /PRNewswire/ -- International Paper (NYSE: IP) and Temple-Inland Inc. (NYSE: TIN) 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 USD 32.00 per share in cash, plus the assumption of USD 600 million in Temple-Inland's year-end debt. The total transaction value is approximately USD 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.

"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," said John Faraci, International Paper chairman and CEO. "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," he said.

"This transaction creates value for both Temple-Inland and International Paper shareholders," said Doyle R. Simons, Temple-Inland chairman and CEO. "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 USD 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.

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 USD 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, and 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.

In connection with the proposed merger, Temple-Inland will file a proxy statement with the Securities and Exchange Commission (SEC). Investors and security holders are advised to read the proxy statement when it becomes available because it will contain important information about the merger and the parties to the merger. Investors and security holders may obtain a free copy of the proxy statement (when available) and other documents filed by Temple-Inland at the SEC website at http://www.sec.gov. The proxy statement and other documents also may be obtained (after it has been filed with the SEC) for free from International Paper by directing such request to International Paper, Investor Relations, telephone 800-678-8715.

International Paper 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. Net sales in 2010 were more than USD 25 billion. For more information about International Paper, its products, and stewardship efforts, visit internationalpaper.com.

Temple-Inland Inc. is a manufacturing company focused on corrugated packaging and building products. The fully integrated corrugated packaging operation consists of seven 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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