Champion International Corporation Completes Sale of New York Forestlands to The Conservation Fund.

STAMFORD, Conn.--(BUSINESS WIRE)--July 1, 1999--

Champion International Corporation (NYSE:CHA) announced today that it completed the sale of approximately 143,000 acres of forestlands in Franklin, Lewis, Herkimer, and St. Lawrence Counties, New York, to The Conservation Fund, which then immediately sold these lands to the State of New York and the Heartwood Forestland Fund III, LP.

In December, 1998, Champion announced that it had agreed to sell approximately 300,000 acres of forestlands in the States of New York, Vermont, and New Hampshire to The Conservation Fund for $76.2 million.

As part of the transaction, announced today, the State of New York purchased approximately 29,000 acres of land for nearly $25 million, using funds from the 1996 Clean Water/Clean Air Bond Act. This land will be added to the Adirondack Forest Preserve and managed by the New York Department of Environmental Conservation (DEC) as part of three separate Northern Flow River Areas - the Santa Clara, Tooley Pond, and Croghan tracts - until the Adirondack Park Agency classifies the land and the DEC develops a long-term plan for the three tracts.

The Heartwood Forestland Fund III, LP, a firm specializing in timberland investments, purchased the remaining 114,000 acres, of which 110,000 acres are in the Adirondack State Park, for approximately $21 million. These lands will be subject to a conservation easement that will provide public access to a portion of the lands while preserving their status as privately owned forestlands managed for their timber value.

The remaining Northeast lands that the company has agreed to sell to The Conservation Fund for approximately $30 million consist of about 133,000 acres in the State of Vermont and about 18,000 acres in the State of New Hampshire. The completion of the sale of the land in Vermont and New Hampshire is expected during the third quarter of this year.

Richard E. Olson, Champion's chairman and chief executive officer, said, "This transaction is another step in our plan to make Champion a more profitable company. These lands are no longer strategic for Champion, and this sale allows us to put their value to better use for our shareholders."

In October of 1997, Champion announced its intention to divest several non-strategic product segments, facilities and forestlands as part of its three-pronged strategy to maximize total shareholder return by focusing on strategic businesses, increasing profitability and improving financial discipline. In 1998, the company sold its newsprint business and Texas recycling centers to Donohue, Inc. and its ovenable-board business to Tenneco, Inc. Champion sold the Canton, North Carolina paper mill, an extruding and converting facility, and its liquid packaging business to Blue Ridge Paper Products Inc. in May of this year, and it sold its Deferiet, New York paper mill to The Deferiet Paper Company, a new, wholly owned subsidiary of Crabar Paper & Allied Products Corporation, last month.

Champion International Corporation is an integrated forest products company with significant operations in the United States, Canada, and Brazil. Champion is a major producer and distributor of coated and uncoated papers. The company's other products include market pulp, lumber and plywood, and selected paper for packaging. Champion has the responsibility for the sustainable management of almost eleven million acres of forestlands supporting its manufacturing facilities.