Avery Dennison and Zweckform Complete Transaction to Create Leading European Office Products Supplier.

PASADENA, Calif./BRANNENBURG, Germany--(BUSINESS WIRE)-- Jan. 12, 1999--Avery Dennison Corp. (NYSE:AVY) (PSE:AVY) and Steinbeis Holding GmbH today announced the completion of a transaction to form a joint venture to manufacture and market office products throughout Europe.

The agreement to form the joint venture was announced previously on Oct. 26, 1998.

"Forming this strategic alliance is an important step in our global expansion strategy," said Philip M. Neal, president and chief executive officer of Avery Dennison.

"This new operation provides excellent strategic opportunities for both companies to increase market position due to the strong brand awareness throughout Europe for both Avery and Zweckform products. We are looking forward to introducing our Avery-brand products to the rapidly growing German and Eastern European office products markets where the Zweckform brand is well established."

The new operation combines Avery Dennison's office products business in Europe, which sells office products under the Avery brand name, with Zweckform Buro-Produkte, a Steinbeis business unit and leading German office products supplier. Zweckform branded products had 1997 sales of approximately $120 million (DEM 195 million).

The new alliance provides Avery Dennison with a solid platform for further expansion in additional office products categories throughout Europe.

Avery Dennison holds a majority ownership position in the joint venture, with Steinbeis maintaining a minority stake in the operation. The joint venture will operate as Avery Dennison Zweckform Office Products Europe GmbH, and is based in Oberlaindern, Germany.

A transition team of employees from both Avery Dennison and Zweckform has been working to develop plans for the integration of operations since the joint venture announcement was made.

It is expected that Zweckform operations will be combined fully with Avery Dennison's European office products business by the third quarter of 1999. Both joint venture partners expect to realize synergies in research and development and manufacturing, while achieving marketing, sales and distribution efficiencies.

Avery Dennison, with sales of $3.3 billion in 1997, develops, manufactures and markets innovative self-adhesive solutions for consumer products and label systems. The Consumer and Converted Products sector, which includes the Worldwide Office Products business, generated sales of $1.8 billion in 1997.

Based in Pasadena, Avery Dennison makes a wide range of products for consumer and industrial markets, including Avery-brand office products, Fasson-brand self-adhesive materials, peel-and-stick postage stamps, battery labels, automated retail tag and labeling systems, and specialty tapes and chemicals.

Approximately 16,100 employees in 200 manufacturing and sales facilities produce and sell Avery Dennison products in 89 countries.

Zweckform Buro-Produkte GmbH is a member of the Steinbeis group of companies with consolidated sales of $385 million (DEM 636 million) in 1997. Zweckform products include labels, films and specialty papers for use with personal computers, desktop printers and copiers.

Forward-Looking Statements 

Certain information presented in this news release may constitute "forward-looking" statements. These statements are subject to certain risks and uncertainties. Actual results and trends may differ materially from historical or expected results depending on a variety of factors, including but not limited to availability of raw materials, foreign exchange rates, worldwide economic conditions, fluctuations in consumer demand affecting production and inventory levels at customer companies and other matters referred to in the company's Securities and Exchange Commission filings.