July 15, 2004
Bayer to Pay $66 Mln to Settle Price Fixing Charge
Bayer AG, Germany‚s second-biggest drug and chemical maker, agreed to pay $66 million to settle a U.S. charge it participated in a global conspiracy to fix prices of chemicals used to make rubber. Bayer agreed to assist the government‘s investigation that has already netted the guilty plea of Crompton Corp., which was fined $50 million for its role in the cartel, the Justice Department said. European Union and Canadian authorities are also investigating the cartel.
Bayer agreed to plead guilty in federal court in San Francisco to one charge of conspiring with other participants to fix prices between 1995 and 2001.
The plea bargain “is an important step in our prosecution of a cartel that harmed millions of American consumers who use a broad spectrum of products manufactured with rubber chemicals,‚‘ said R. Hewitt Pate, the Justice Department‚s chief antitrust enforcer. The guilty plea will expose Bayer to possible civil damages sought by tiremakers and other purchasers of chemicals for making synthetic rubber.
Civil Damages
Prosecutors said Bayer representatives participated in meetings with other companies where prices were set for rubber chemicals used to improve the elasticity, strength and durability of rubber used in tires, outdoor furniture, hoses, belts and footwear.
Bayer, Crompton and BASF AG, the world‘s largest chemical maker, have been named in at least 13 antitrust lawsuits filed in U.S. courts accusing the companies of fixing prices for urethane, a component of plastics and synthetic rubber used to make conveyer belts, tires, gaskets and soles for shoes.
In May, Goodyear Tire & Rubber Co., the largest North American tire maker, accused Crompton, Bayer and other companies of conspiring to overcharge for ethylene propylene diene monomer, or EPDM, synthetic rubber. The Goodyear lawsuit also names Polimeri Europa SpA of Italy and DSM Elastomers BV in the Netherlands.
Joint Venture
DuPont Dow Elastomers LLC, a joint venture of the two largest U.S. chemical companies, has agreed to pay $36 million to settle antitrust claims by customers it overcharged for neoprene, a synthetic rubber. A federal judge in Washington gave preliminary approval last month to the settlement, according to documents on the court‚s Web site.
DuPont Co., based in Wilmington, Delaware, has agreed to pay 100 percent of any liability of the joint venture up to $150 million and 75 percent of any amount exceeding that figure, DuPont and Dow Chemical Co. said in April.
Freudenberg-NOK, an auto parts joint venture of Germany‘s Freudenberg & Co. and Japan’s NOK Corp., also accused Dow, DuPont and Crompton of fixing prices in a separate suit filed in San Francisco.
American depositary receipts of Bayer, each representing one ordinary share, dropped 17 cents to $27.80 at 3:48 p.m. in New York Stock Exchange composite trading. (Bloomberg)