Archer Daniels Midland Co. said on Thursday it had reached a $400 million settlement in a class-action civil lawsuit that accused the agribusiness company of conspiring to fix prices of a food sweetener.
The proposed settlement stems from a long-running lawsuit filed by an array of food and beverage companies, such as Coca-Cola Co and PepsiCo Inc., that accused ADM of teaming up with other manufacturers to fix prices of high-fructose corn syrup, a sugar substitute, in the early 1990s.
Last month, Cargill Inc. won federal court approval for a $24 million settlement stemming from accusations of conspiring to fix prices of the corn syrup. Cargill, based in St. Paul, Minnesota, was accused of teaming up with ADM and A.E. Staley Manufacturing, a unit of British-based Tate & Lyle Plc.
The price fixing case was scheduled for a jury trial on Sept. 7. Decatur, Illinois-based ADM, the No. 1 U.S. food processor, said the plaintiffs sought damages of $1.6 billion, an amount that could be tripled in the event of a finding of liability.
"In light of the potential exposure inherent in litigation, the Board of Directors concluded that it was in the best interests of the company to dispose of this matter," ADM Chairman and Chief Executive G. Allen Andreas said in a statement.
The proposed settlement is subject to court approval, but the parties involved have agreed "that all aspects of this dispute with ADM have been fully and satisfactorily resolved," the company said.
An ADM spokesman was not immediately available for further comment.
The food sweetener lawsuit grew out of a federal investigation into ADM's involvement in a price-fixing scandal over the prices of lysine, a protein used in animal feed, and citric acid.
ADM pleaded guilty in 1996 to tampering with the prices of lysine and citric acid, and three former ADM executives received prison sentences as part of the scandal. The U.S. Justice Department investigated but never brought charges against ADM for activities involving high-fructose corn syrup.
Three years ago, a federal judge in Illinois dismissed the corn syrup civil lawsuit, but a federal appeals court based in Chicago reinstated the suit in 2002, clearing the way for the case to go to trial.