Avery Dennison Prices $400 Million 7.875% Corporate HiMEDS Units Offering

Business Wire, Nov 15, 2007

PASADENA, Calif. -- Avery Dennison Corporation (NYSE:AVY) announced today that it has priced its offering of 8,000,000 Corporate HiMEDS Units at 7.875% with a stated amount of $50.00 per unit, for an aggregate stated amount of $400 million. The offering is expected to close on November 20, 2007, subject to customary closing conditions. Avery Dennison has also granted the underwriters an option to purchase up to 800,000 additional Corporate HiMEDS Units at 7.875%, for an aggregate additional stated amount of $40 million, solely to cover over-allotments, if any.

Avery Dennison intends to use the net proceeds to repay commercial paper obligations it incurred principally in connection with financing its acquisition of Paxar Corporation in June 2007.

Each Corporate HiMEDS Unit will initially consist of a contract to purchase Avery Dennison common stock and a 1/20 undivided beneficial ownership interest in a $1,000 principal amount senior note due November 15, 2020. Under each purchase contract, the holder is required to purchase between 0.7682 shares and 0.9756 shares of Avery Dennison common stock, in each case subject to anti-dilution adjustments, no later than on November 15, 2010. The threshold appreciation price of the purchase contracts is $65.09, which represents a premium of approximately 27.00% over the last reported sale price of Avery Dennison common stock of $51.25 on November 14, 2007. Pursuant to the Corporate HiMEDS Units, Avery Dennison will make quarterly cash payments to holders in connection with interest on the senior notes, payable at 5.350% per year, and contract adjustment payments on the purchase contracts, payable at 2.525% per year. The Corporate HiMEDS Units will carry a total distribution rate of 7.875% per year.

The joint book-running managers for this offering are J.P. Morgan Securities Inc. and Citi with Banc of America Securities LLC, Barclays Capital Inc. and Wachovia Capital Markets, LLC as co-managers.

This announcement does not constitute an offer to sell or a solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. The HiMEDS Units offering may be made only by means of a prospectus and a related prospectus supplement, copies of which may be obtained when available from J.P. Morgan Securities Inc., at 1 Chase Manhattan Plaza, Floor 5B 10081 and from Citi, at Brooklyn Army Terminal, 140 58th Street, 8th Floor, Brooklyn, NY 11220.

Avery Dennison is a global leader in pressure-sensitive labeling materials, retail tag, ticketing and branding systems, and office products. Based in Pasadena, Calif., Avery Dennison is a FORTUNE 500 Company with 2006 sales of $5.6 billion. Following the acquisition of Paxar in 2007, Avery Dennison employs more than 30,000 individuals in 51 countries worldwide, who develop, manufacture and market a wide range of products for both consumer and industrial markets. Products offered by Avery Dennison include: Fasson brand self-adhesive materials; Avery Dennison and Paxar brand products for the retail and apparel industries; Avery brand office products and graphics imaging media; specialty tapes, peel-and-stick postage stamps, and labels for a wide variety of automotive, industrial and durable goods applications.

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995:

Certain statements contained in this document are "forward-looking statements" intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. Such forward-looking statements and financial or other business targets 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 risks and uncertainties relating to investment in development activities and new production facilities; fluctuations in cost and availability of raw materials; ability of the Company to achieve and sustain targeted cost reductions, including synergies expected from the integration of the Paxar business in the time and at the cost anticipated; ability of the Company to generate sustained productivity improvement; successful integration of acquisitions; successful implementation of new manufacturing technologies and installation of manufacturing equipment; the financial condition and inventory strategies of customers; customer and supplier concentrations; changes in customer order patterns; loss of significant contract(s) or customer(s); timely development and market acceptance of new products; fluctuations in demand affecting sales to customers; impact of competitive products and pricing; selling prices; business mix shift; credit risks; ability of the Company to obtain adequate financing arrangements; fluctuations in interest rates; fluctuations in pension, insurance and employee benefit costs; impact of legal proceedings, including the Australian Competition and Consumer Commission investigation into industry competitive practices, and any related proceedings or lawsuits pertaining to this investigation or to the subject matter thereof or of the concluded investigations by the U.S. Department of Justice ("DOJ"), the European Commission, and the Canadian Department of Justice (including purported class actions seeking treble damages for alleged unlawful competitive practices, which were filed after the announcement of the DOJ investigation), as well as the impact of potential violations of the U.S. Foreign Corrupt Practices Act based on issues in China; changes in governmental regulations; changes in political conditions; fluctuations in foreign currency exchange rates and other risks associated with foreign operations; worldwide and local economic conditions; impact of epidemiological events on the economy and the Company's customers and suppliers; acts of war, terrorism, natural disasters; and other factors.