Bayer Corp. has agreed to plead guilty and pay a $33 million fine for participating in a conspiracy from 1998 to 2002 to fix prices of aliphatic polyester polyols, an essential raw material in the production of polyurethane foams, elastomers, coatings and sealants.
Bayer's plea is the first charge in an ongoing investigation of the business, according to the U.S. Department of Justice, which is conducting the probe. Under the plea agreement, which must be approved by the court, Bayer has agreed to assist the government in its investigation.
If approved by the court, the agreement will resolve all criminal charges against Bayer for activities related to its adipic-based polyester polyols business, according to Pittsburgh-based Bayer, which said it would take a ``respective provision'' covering the charges in the third quarter.
According to the one-count felony charge filed in the U.S. District Court in San Francisco, Bayer conspired with an unnamed producer and unnamed individuals to suppress and eliminate competition in the United States for aliphatic polyester polyols made from adipic acid. This product line, sold under the trade name Baycoll, now operates under Bayer MaterialScience, one of four business operating groups within Bayer AG, the German parent company.
``Today's charge represents a significant step in our continuing effort to eliminate illegal cartel activity,'' said R. Hewitt Pate, assistant attorney general in charge of the DOJ's Antitrust Division.
Global production capacity for aliphatic polyester polyols is reported to be in excess of 1.1 million metric tons (2.43 billion pounds), according to market research firm IAL Consultants Ltd.