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KEYCODE BAYER #233

March 7, 2006

Justice Department subpoenas Bayer

FRANKFURT, Germany -- Bayer AG has been subpoenaed by the U.S. Justice Department seeking information about its plastics unit, MaterialScience, the company revealed in a filing with the U.S. Securities and Exchange Commission.
The company said the Justice Department sought information related to its manufacture and sale of polyurethane products called MDI and TDI, along with other products. According to the filing, made Monday in Washington, Bayer said it received the subpoena on Feb. 16.
The company didn't comment further on the subpoena but said it is cooperating completely.
Bayer informed the SEC it "has been named, among others, as a defendant in multiple putative class action lawsuits which have been consolidated in federal district court in Kansas, involving allegations of price fixing of, inter alia (among other things), polyether polyols and certain other precursors for urethane end-use products."
The company added "matters are at an early stage," and a motion to dismiss the consolidated action was pending.
Bayer's MaterialScience posted sales of 10.7 billion euros ($12.75 billion) in 2005, up 24 percent from 2004. The polyurethanes division of MaterialScience, which make TDI and MDI, reported growth of 24 percent to 6.61 billion euros ($7.87 billion) in revenue last year.

March 06, 2006

Bayer Drops on New Subpoena, Liability

NEW YORK - Investors were bearish on Bayer AG Monday, after the German drug maker and chemical company told regulators it received a subpoena from the U.S. Attorney for New Jersey in February relating to one issued by Defense Department investigators in 2004 over its withdrawn cholesterol treatment Baycol.
The news, on top of a disappointing fourth-quarter earnings report, sent American depositary shares of Bayer down $2.01, or 4.9 percent, to $38.71 in afternoon trading on the New York Stock Exchange at more than five times their average volume. ADS have traded between $31.16 and $44.31 over the past 52 weeks.
The subpoena covers documents the company provided to the inspector general of the Defense Department over a contract to supply the government with Baycol, which was taken off the market in 2001 after it was linked to a sometimes fatal muscle wasting disease. Representatives for the U.S. Attorney for New Jersey were unable to comment on the subpoena.
In filings with the Securities and Exchange Commission, the company said its existing insurance coverage for Baycol liability was exhausted and it could be subject to further payments. Bayer has settled 3,082 lawsuits worldwide for $1.15 billion without admitting wrongdoing as of Jan. 13.
Bayer said about 5,900 lawsuits are pending in the United States including putative class action suits.
The company also reported on Monday that fourth quarter earnings fell 33 percent to 46 million euros ($55.3 million) after it took a 275 million euro ($330.5 million) charge to settle charges it colluded on prices of rubber and plastic in the United States.


March 17, 2006, AFX News Limited

Bayer expects additional costs from synthetics price-fixing investigations

FRANKFURT (AFX) - Bayer AG said it expects additional costs from the investigations into possible price-fixing of some synthetic rubber chemicals, the Financial Times Deutschland reported citing an annual report sent to the US Securities and Exchange Commission.

The statement concerns activities in several countries including the US, Canada and the European Union's member states.

Bayer did not state how high these costs could be in the report. 'We can only do that for situations that we can forecast with absolute certainty,' a company spokesman told the newspaper.

In the fourth quarter of 2005, Bayer booked 275 mln eur in provisions in order to cover costs it may have to pay clients affected by the alleged price-fixing.

Bayer also reiterated in the report that sales of its Trasylol drug could decline after studies revealed possible health risks associated with it. Bayer disputes the conclusions made in these studies.