Roche Allocates $808 Million for Ongoing Price Fixing ClaimsRoche Allocates $808 Million for Ongoing Price Fixing Claims
October 10, 2002
BASEL, Switzerland--Roche Group AG released sales figures for the first nine months of 2002, showing revenues of more than 21 billion Swiss francs ($14 billion). Most divisions showed slight growth, including the Vitamins & Fine Chemicals segment, which the company said was a positive given the "difficult economic climate."
It noted that it expects the DSM acquisition of the vitamin division to close in the first quarter of 2003. Growth projections for the future were generally upbeat, emphasizing the division's "robust" sales growth in China and "innovative" products for functional foods. These include a concentrated polyunsaturated fatty acid formulation, lycopene, lutein and natural-source vitamin E.
As was reported when DSM agreed to purchase the vitamin division, Roche maintains all liability associated with the vitamin price-fixing cases. It has concluded some out of court settlements with direct customers in the United States; however, in light of legal developments and ongoing negotiations with other customers, the company set aside 1.2 billion Swiss francs ($808 million) to cover liabilities associated with the case.
"There is no question that the vitamin case is a difficult legacy from the 1980s and 1990s," said Franz B. Humer, chairman of the board and chief executive officer of Roche (www.roche.com). "Following intensive negotiations, we are moving toward settling the lawsuits that are still outstanding in the United States. The fact that we have had to record additional provisions of 1.2 billion Swiss francs is all the more unfortunate, as it casts a shadow over Roche's major strategic and operational achievements."
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