March 17, 2008 - International Paper has signed an agreement with Weyerhaeuser to purchase its Containerboard, Packaging and Recycling (CBPR) business for $6 billion in cash, subject to post-closing adjustments.

The deal includes nine containerboard mills, 72 packaging locations, 10 specialty-packaging plants, four kraft bag and sack locations and 19 recycling facilities (see list below). Weyerhaeuser's CBPR business employs about 14,300 people.

"We are pleased with the outcome and we will continue to focus on those areas that present the greatest opportunities for the future," said Steven R. Rogel, chairman and CEO of Weyerhaeuser."This future begins with the trees and the land, and our outstanding stewardship of these resources. To this we add our unique expertise in growing and extracting value from the trees and the land on which they grow."

Weyerhaeuser said it expects to use a substantial portion of the after-tax proceeds from the sale to pay down debt.

For International Paper, the transaction is a purchase of assets rather than of stock, and IP will realize a tax benefit that has an estimated net present value of approximately $1.4 billion. Taking this benefit into account, the net purchase price is about $4.6 billion, IP said.

"This deal represents a compelling opportunity for International Paper and our shareowners at a very attractive valuation," said IP's chairman and CEO John Faraci. "Integrating Weyerhaeuser's CBPR business into our North American packaging platform fits very well with our strategy to improve our earnings, cash flow and returns by strengthening existing businesses. We expect the combined packaging business will generate stronger cash flow and higher EBITDA margins than either standalone business."

Carol Roberts, senior vice president of IP's packaging business, said she sees low integration risk and considerable upside potential in the deal. "Weyerhaeuser has low-cost, well-run assets that complement our existing mill and converting system and offer significant synergies," she said. "The acquisition expands our geographic presence in the U.S. and Mexico and diversifies our customer base in key product lines. All of this will make our packaging business more competitive, more profitable and better able to serve customers."

IP has identified profit improvement opportunities of about $400 million annually from the acquisition. The company expects to achieve at least 40 percent of the improvement within 12 months of completing the deal, with the remainder fully realized by the end of the third year, as a result of reducing duplicate overhead costs, integrating manufacturing operations, optimizing product mix, and improving operational and supply chain efficiencies.

The companies expect the deal to close in the third quarter 2008.

 Weyerhaeuser's CBPR Asset List

  -- Nine containerboard mills (6.3 million tons capacity)
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           Alabama: Pine Hill
           California: Oxnard
           Iowa: Cedar Rapids
           Kentucky: Henderson
           Louisiana: Campti
           Oklahoma: Valliant
           Oregon: Albany, Springfield
           Mexico: Xalapa

  -- 72 packaging locations (99.4 billion square feet capacity)
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           Alabama: Huntsville
           Arizona: Phoenix, Yuma
           Arkansas: Fort Smith, Russellville
           California: Anaheim, Camarillo, Compton, Elk Grove, Exeter,
            Modesto, Salinas, Sanger, Santa Paula
           Colorado: Golden
           Florida: Plant City, Tampa
           Georgia: Columbus, Griffin, Lithonia
           Illinois: Aurora, Bedford Park, Belleville, Lincoln,
            Montgomery, Rockford
           Indiana: Butler, Indianapolis
           Iowa: Cedar Rapids, Waterloo
           Kansas: Kansas City
           Kentucky: Bowling Green, Louisville
           Michigan: Three Rivers, Warren
           Minnesota: Austin, Fridley, St. Paul, White Bear Lake
           Mississippi: Jackson, Magnolia, Olive Branch
           Missouri: Maryland Heights, St. Joseph
           Nebraska: Omaha
           New Jersey: Barrington, Bellmawr
           New York: Rochester
           North Carolina: Charlotte, Lumberton, Newton
           Ohio: Delaware, Eaton, Mount Vernon
           Oklahoma: Oklahoma City
           Oregon: Beaverton, Portland
           Tennessee: Cleveland
           Texas: Amarillo, Dallas, McAllen, Sealy
           Virginia: Lynchburg
           Washington: Bellevue, Moses Lake, Olympia, Yakima
           Wisconsin: Manitowoc
           Mexico: Ixtac, Mexico City, Monterrey, Silao

  -- 10 specialty packaging plants
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           California: Cypress
           Georgia: Tucker
           Illinois: Aurora
           Indiana: Indianapolis
           Kentucky: Richwood
           North Carolina: Charlotte
           Ohio: Delaware
           Oregon: Beaverton, Hillsboro, Salem

  -- Four kraft bag and sack locations (199,000 tons capacity)
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           California: Buena Park
           North Carolina: Charlotte
           Oregon: Beaverton
           Texas: Dallas

  -- 19 recycling facilities
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           Arizona: Phoenix
           California: Fremont, Los Angeles/Norwalk, West Sacramento
           Colorado: Denver
           Illinois: Chicago/Itasca
           Iowa: Des Moines
           Kansas: Wichita
           Maryland: Baltimore
           Minnesota: New Brighton
           Nebraska: Omaha
           North Carolina: Charlotte
           Oregon: Beaverton, Eugene
           Tennessee: Memphis
           Texas: Carrollton
           Utah: Salt Lake City
           Virginia: Richmond
           Washington: Kent

SOURCE: Weyerhaeuser and International Paper