Resolution of A.E. Staley Litigation
Tate & Lyle PLC
Tate & Lyle PLC
RESOLUTION OF A.E. STALEY LITIGATION
Tate & Lyle PLC announced today that its subsidiary A.E. Staley Manufacturing
Company ('Staley') has reached agreement to end the long running high fructose
corn syrup ('HFCS') civil antitrust legal case.
Under the terms of the settlement, Staley will pay total damages of $100 million
(£55 million). This will result in an exceptional charge to the profit and loss
account of this amount. As the payment is expected to be tax deductible in the
US, this equates to a charge of $60 million (£33 million) on an after tax basis.
The settlement funds will be paid into escrow by Staley during the next week.
The settlement needs to be formally approved by the United States District Court
for the Central District of Illinois.
Staley continues to deny emphatically involvement in any wrongdoing, but has
settled with great reluctance to ensure an end to this lengthy action and to
avoid the risk and uncertainty that a US jury trial would involve.
Staley was one of a number of manufacturers of HFCS, including Archer Daniels
Midland (ADM) and Cargill, targeted by plaintiffs' lawyers in a class action
that alleged violations of certain anti-trust laws during the period 1988 to
1995. The action was brought on behalf of purchasers of HFCS during that period,
primarily US food and beverage manufacturers. Damages claimed in the case
amounted to $1.4 billion, subject to automatic tripling and the addition of
attorneys' fees. Under US civil anti-trust laws, defendants in trials of this
type are jointly and severally liable for any damages awarded to the plaintiff.
The case was filed with the United States District Court for the Central
District of Illinois in Peoria in July 1995, but dismissed by that Court in
August 2001. That dismissal was overturned by the United States Court of Appeals
for the Seventh Circuit in June 2002. The case was proceeding to a full jury
trial in early September 2004. On 15th March 2004, the District Court approved
Cargill's (and American Maize Product Company's) settlement with the Plaintiffs
in the amount of $24 million. On 17th June 2004, ADM announced that it had
agreed to settle for $400 million. The settlement announced today brings the
action to a complete end.
Robert Gibber, Tate & Lyle PLC General Counsel, commented:
'In 1995, a Grand Jury reviewed millions of pages of evidence yet brought no
charges against any manufacturer of HFCS. However, as is typical in the US, this
was followed by a civil class action alleging violations of federal anti-trust
laws.
'We deny emphatically involvement in any wrongdoing and believe we were in a
position to demonstrate this at trial. However, particularly in light of the
recent settlements by the other defendants, a jury trial would have exposed
Staley to a degree of risk, itself magnified by automatic tripling of damages
and the addition of attorneys' fees, which could not be justified. For this
reason we reluctantly decided to settle on the best terms available from the
plaintiffs as announced today. This agreement does not involve any admission of
liability but does remove the uncertainties hanging over Staley from these
proceedings.'
CONTACTS
Mark Robinson, Head of Investor Relations
Tel: 020 7626 6525 or Mobile: 07793 515861 investorrelations@tateandlyle.com
Chris Fox, Director of Corporate Relations (Press)
Tel: 020 7626 6525 or Mobile: 07801 808553
Tate & Lyle is a world leader in ingredients. Its core competence is to take
corn, wheat or sugar, and add value to these raw materials through technology.
As a result of continuous innovation it offers an ever-wider product portfolio
of versatile and functional ingredients. These products include Cereal
Sweeteners, Starches, Sugars, Citric Acid and SPLENDA(R)Sucralose. Tate & Lyle
products have wide applications in the food, beverage, pharmaceutical, cosmetic,
paper, packaging and building industries. With headquarters in London, Tate &
Lyle operates more than 41 plants and 20 additional production facilities in 28
countries, almost all in Europe and the Americas. It employs 6,700 people in its
subsidiaries with a further 4,800 employed in joint ventures. Sales in the year
to 31 March 2004 totalled £3,167 million. More details are available on this
website www.tateandlyle.com.
SPLENDA(R) is a trademark of McNeil-PPC, Inc.
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